Hewlett Packard Enterprise CEO Antonio Neri on his 'biggest worry' after earnings

Hewlett-Packard Enterprise CEO Antonio Neri says the tech giant is grappling with market uncertainty marked by longer sales cycles.

The tech giant's most recent financial results, announced on Thursday, were welcomed by Wall Street— especially after HPE raised its outlook.

But Wedbush's head of technology trading says the results underline HPE's struggles in the cloud.

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Hewlett Packard Enterprise boosted its profit outlook for the year, which is lifting its shares up some 1% on Friday. But CEO Antonio Neri says the tech giant is grappling with a more ambivalent corporate tech market.

HPE's stock was ahead 2% in afternoon trades. On Thursday, the tech giant raised its adjusted profit outlook for the current fiscal year to a range of $1.62 to $1.72 a share, up from a previous target of $1.56 to $1.66 a share.

“There is uncertainty there, and the uncertainty drives elongated sales cycles,” he told Business Insider. “That's my biggest worry.”

To his point: After seeing a strong uptick in 2018, corporate IT spending has hit pause, which was also highlighted in the recent earnings reports of chipmakers Intel and Nvidia, which make chips that power data centers and cloud platforms.

Read more: New Intel CEO Bob Swan takes a humble tone in a meeting with investors after a huge earnings shortfall: 'We let you down'

The good news, for now, is that Wall Street was happy with HPE's second-quarter report, announced on Thursday — which featured a dip in sales, but a higher earnings target for the year. It also comes in the wake of HPE's recent announcement that it intends to buy legendary supercomputing company Cray for $1.3 billion.

But on the call with analysts, Neri said that some HPE deals were not closing in the time the company expected.

“The longer the uncertainty goes, the worse it gets,” Neri said on the call. “We continue to monitor to see what else we can do.”

HPE's two main businesses posted lower sales. Its division focused on networking equipment, which includes products from its Aruba Networks subsidiary, saw revenue fall by 6% year-over-year, while its hybrid cloud business, which includes high performance computing systems, severs and data storage, reported a 4% drop.

Lingering uncertainty

HPE was the product of the 2015 split of Hewlett-Packard, the iconic Silicon Valley giant, which once sold everything from PCs and printers to servers, storage systems used for data centers and cloud platforms.

HPE got the data center and cloud stuff, and is slugging it out with longtime rivals such as IBM and Microsoft. But it has struggled in the battle for the cloud, where HPE is pushing a hybrid strategy — offering products and services that integrate its own servers and data center hardware with the major cloud computing platforms, including Amazon Web Services and Microsoft Azure. Revenue for that hybrid business slipped last quarter.

HPE reported gains in operating margin, which IDC President Crawford Del Prete “shows positive momentum around their strategy to go after higher margin pools.” But the company's Aruba Networks business, which competes head-to-head with the likes of Cisco, clearly showed some weakness.

“I don't think there's something wrong with the Aruba product set per se, but they are not executing in the US,” he told Business Insider. “This is clearly a sales issue.”

'Cloud cannibalization'

Joel Kulina, head of technology trading at Wedbush, said HPE's sluggish revenue underscores the impact of the ongoing shift to the cloud.

Cloud computing has allowed companies to access computing power via the web, dramatically lowering their IT costs since they don't have to spend a fortune building their own data centers. This trend has hurt big tech companies selling high-margin computing gear, including HPE.

“These results are a reminder that last year's robust enterprise spend was an outlier,” he told Business Insider. And that robust spend, he said, “will likely be followed by years of sluggishness/declining revenue trends for the enterprise server and storage market as cautious capex spend and cloud cannibalization weighs on enterprise budget allocation.”

惠普企业首席执行官Antonio Neri表示，这家科技巨头正在努力应对因销售周期延长而面临的市场不确定性。该技术巨头周四宣布的最新财务业绩受到欢迎华尔街 - 特别是在HPE提升其前景之后。但Wedbush的技术交易负责人表示，结果强调了HPE在云计算中的挣扎。访问Business Insider的主页以获取更多故事 Hewlett Packard Enterprise提升该公司今年的盈利前景将于周五上调1％左右。但首席执行官安东尼奥里尼说，这家科技巨头正在努力应对更加矛盾的企业科技市场。在下午的交易中，HPE的股价领先2％。周四，该科技巨头将当前财年的调整后利润预期上调至每股1.62美元至1.72美元的范围，高于先前每股1.56美元至1.66美元的目标。“这里存在不确定性，并且不确定性推动销售周期延长，”他告诉Business Insider。 “这是我最担心的问题。”至于他的观点：在2018年看到强劲上涨后，企业IT支出暂停，最近英特尔和Nvidia的芯片制造商盈利报告也突显了这一点数据中心和云平台。阅读更多：新的英特尔首席执行官鲍勃·斯旺在与巨额盈利不足之后与投资者会面时采取了谦虚的态度：“我们让你失望”这个好消息，就目前来说，华尔街对于周四宣布的第二季度报告感到满意 - 该报告显示销售额下滑，但今年的收益目标更高。它也是在HPE最近宣布计划以13亿美元收购传奇超级计算公司Cray之后发布的。在与分析师的电话会议上，Neri表示，一些HPE交易并没有在公司预期的时候关闭。 “不确定性越长，越糟糕，”内里在电话中说。 “我们继续监控以了解我们还能做些什么。”在HPE的两个主要业务中，销售额下降。它的专注于网络设备的部门，包括其Aruba Networks子公司的产品，收入同比下降6％，而其混合云业务，包括高性能计算系统，服务器和数据存储，报告下降4％ 。持续存在的不确定性HPE是惠普这个标志性的硅谷巨头2015年分拆的产物，该公司曾经销售从PC和打印机到服务器，用于数据中心的存储系统和云平台的所有产品。惠普获得了数据中心和云端产品，并且正在与IBM和微软等长期竞争对手展开竞争。但它在争夺云计算方面一直在努力，HPE正在推动混合战略 - 提供将自己的服务器和数据中心硬件与主要云计算平台（包括Amazon Web Services和Microsoft Azure）集成的产品和服务。该混合业务的收入在上个季度有所下滑.HHE报告经营利润率上升，IDC总裁克劳福德德尔普雷特“显示其追求利润率较高的策略的积极势头”。但该公司的Aruba Networks业务与思科之类的竞争对手明显表现出一些弱点。“我认为Aruba产品本身并没有出现问题，但它们不是在美国执行，”他告诉Business Insider。 “这显然是一个销售问题。”“云端自相残杀”作为Wedbush技术交易主管Joel Kulina表示，HPE的低收入突显了持续转向云计算的影响。云计算使公司能够通过网络访问计算能力，从而大大降低了IT成本，因为他们不必花费大量资金建立自己的数据中心。这种趋势已经损害了大型科技公司销售高利润计算设备，包括HPE。“这些结果提醒人们，去年强劲的企业支出是一个异常值，”他告诉Business Insider。他说，这种强劲的支出“可能会被追随多年来企业服务器和存储市场的低迷/收入趋势下降，因为谨慎的资本支出和云计算对企业预算分配造成了压力。”