Hewlett Packard Enterprise Backs FY16 Guidance; Provides FY17 Outlook

(RTTNews) - At Hewlett Packard Enterprise's (HPE) 2016 Securities Analyst Meeting, the company's leadership team provided a strategy update and the financial outlook for fiscal year 2017. It reaffirmed its fiscal year 2016 outlook.

HPE reaffirmed its fiscal year 2016 outlook. Revenue is expected to grow 1-2% year-over-year when adjusted for recent divestitures and currency. Non-GAAP EPS is expected to be approximately $1.90 to $1.95, which is at the high end of the original outlook for the year. As communicated on HPE's third quarter earnings call, the company expects to deliver free cash flow of $1.7 to $1.9 billion in fiscal year 2016 , and to return over $3 billion of cash to shareholders this year, in the form of share repurchases and dividends.

As HPE is structured today, including a full year of ES and Software contribution, HPE expects revenue to be flat to down 1% when adjusted for divestitures and currency. HPE expects non-GAAP EPS to be $2.00 to $2.10 and GAAP EPS to be $0.72 to $0.82. On a normalized basis, excluding the impact from restructuring and separation costs, free cash flow is expected to be approximately $3.6 billion to $3.9 billion.

When adjusted for the lower EPS contribution and expenses associated with the ES and Software transactions, HPE expects reported non-GAAP EPS to be approximately $1.45 to $1.55 and GAAP EPS to be $0.29 - $0.39 for fiscal year 2017.

Fiscal year 2017 reported free cash flow will also be reduced from the normalized level due to the partial year contribution from ES and Software, previously announced restructuring and separation payments, and a $2.5 billion payment to fund the ES pension associated with the spin-merge. Given these factors, HPE expects to deliver negative free cash flow of approximately $1.8 billion in fiscal year 2017.

The company is committed to returning approximately $3 billion in total to shareholders in fiscal year 2017, and will end the year with an operating company net cash balance of approximately $8 billion. In addition, the company expects cash flow to approach normalized levels in fiscal year 2018.

The future HPE is expected to see modest revenue growth in FY17. Non-GAAP EPS would be approximately $1.25 to $1.35 in FY17 with GAAP EPS of $0.29 to $0.39. On a normalized basis, the company expects free cash flow to be approximately $2.1 to $2.4 billion.