HPE stock sinks 10% on weak guidance for fiscal 2026

Hewlett Packard Enterprise shares sank 10% on Thursday after the company issued weak guidance for its fiscal 2026.

At a meeting with analysts Wednesday, HPE said its adjusted earnings per share for the year would be in the range of $2.20 to $2.40. Analysts were expecting earnings per share of $2.40, according to LSEG.

Revenue growth, meanwhile, will be between 17% and 22%, which includes four months of Juniper results from fiscal 2025. The average analyst estimate was for growth of 17%.

If considering a full year of Juniper results for fiscal 2025, the growth rate would be 5% to 10% in fiscal 2026.

CEO Antonio Neri told CNBC’s “Squawk Box” on Thursday that the FY26 guide was a “pro forma guide.”

“What that means? Means that we reset the baseline based on the fact that we only include the four months of Juniper in our 2025 results,” Neri said Thursday. “And so we wanted to be very transparent of the fact that the growth rate will be in that, you know, high single digits.”

HPE, which sells data center equipment, said it plans to focus on several “strategic priorities” aimed to improve the company’s overall business. That includes focusing on networking technology as part of its recent acquisition of Juniper Networks as well as pitching its various artificial intelligence-related technology offerings to both the “sovereign and enterprise segments.”

“In HPE’s new chapter, our strengthened portfolio will create more profitable growth, increasing capital return opportunities that deliver even greater value to our shareholders,” Neri said in a statement on Wednesday.

The company’s board also approved an additional $3 billion in share buybacks, bringing the total share repurchase plan to $3.7 billion.

HPE said in March, when it reported fiscal first quarter earnings, that it would cut its employee headcount by 5%, eliminating roughly 2,500 jobs.

Correction: A prior version of this story used an incorrect revenue forecast in comparison to analysts’ estimates.

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