© Reuters. FILE PHOTO: A trader passes by the post where Hewlett Packard Enterprise Co., is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 25, 2016. REUTERS/Brendan McDermid
(Reuters) – Hewlett Packard Enterprise (NYSE:) Co missed Wall Street estimates for second-quarter revenue on Tuesday, as clients scale down spending on tech, including cloud services, amid an economic slowdown.
Shares of the Texas-based IT company fell 4% after the bell. The stock has declined nearly 3% so far this year.
For some of the largest tech companies, cloud services and data center businesses have been among the biggest growth drivers, including during the pandemic as people worked from home.
But demand for such services has slowed as high prices and an uncertain economy forced businesses to clamp down IT spending in a bid to rein in costs.
Hewlett Packard, whose portfolio includes hybrid cloud platform HPE GreenLake and Aruba, also faces stiff competition from rivals such as Microsoft Corp (NASDAQ:), Amazon.com Inc (NASDAQ:) and Oracle Corp (NYSE:).
Its revenue for the quarter ended April 30 was $6.97 billion, compared with analysts’ average expectations of $7.31 billion, according to Refinitiv data.
Quarterly sales for the company’s compute segment fell 8%, while the storage segment recorded a 3% decline. Its other three segments grew, however.
Hewlett Packard expects revenue for the third quarter to be between $6.7 billion and $7.2 billion. Analysts on average estimate $7.24 billion.
On an adjusted basis, the company earned 52 cents per share in the second quarter, compared with analysts’ estimate of 48 cents per share.
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