HPE drops on weak profit expectations; It will cancel 3000 jobs

(Bloomberg) – Hewlett Packard Enterprise Co. About 15 % after providing annual profit forecasts not less than investor expectations and announced plans to cancel about 3000 jobs.

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Hpe said in a statement on Thursday that the profits, with the exception of some elements, will be from 1.70 to $ 1.90 per share in the fiscal year ending in October 2025. Analysts are estimated, on average, $ 2.12 per share. In the current quarter ending in April, sales will be 7.2 billion dollars to 7.6 billion dollars, compared to the average projection of $ 7.94 billion.

CEO Antonio Neri said in an interview that the low profitability is significantly due to the issues in the server unit that was closely monitored in HPE. He said that the cans are the opponent during sales and higher costs of achieving its achievement and the accumulation of semiconductors from the oldest generation in the profit in the coming quarters. Definitions will also learn about profitability.

Neri said that the company is working through these problems. He said that part of this will be a reduction of about 3000 of the roles – 2500 of which will come through job discounts and the rest through depletion. HPE used 61,000 people as of the end of October, according to organizational stadiums. The company said in the statement that the reduction of the workforce will cost Hpe about 350 million dollars over the next two years.

Artificial Intelligence has fueled a wave of demand for strong servers of devices such as HPE and Dell Technologies Inc. And Super Micro Computer Inc .. However, this line of a double -border sword was due to low margins due to the need to fill these servers with expensive AI chips from NVIDIA Corp. And others.

Neri said that the problems in the server unit that lead to a decrease in profits were present in both traditional equipment and AI.

The shares fell to a level of less than $ 14.87 in trading extending after closing it at $ 17.96 in New York. The stock decreased 16 % this year.

The company said in a presentation that the revenues of the HPE artificial intelligence systems in the first quarter, which ended to January 31, amounted to about 900 million dollars, a decrease of $ 1.5 billion in the previous quarter. The quarterly requests of these systems increased to $ 1.6 billion. Neri said there is a jump in requests by Enterprises, a generally expected client category by analysts to provide higher margins.