Investors bought up shares of Hewlett Packard Enterprises when the giant tech company recently raised its profit outlook for 2019 and also reported better than expected quarterly earnings. But CEO Antonio Neri tempered the enthusiasm saying that “macroeconomic factors” are creating “uneven demand” and impacting customer confidence.
Translation: trade tensions and recession worries are weighing on HPE customers and sales. Quarterly revenues fell 3 percent compared to a year ago.
The majority of HPE’s revenue comes from selling servers, storage and networking equipment for data centers. The San Jose, California company was split from Hewlett Packard in 2015. With 2018 revenues of $30 billion dollars, it is ranked at number 102 on the Fortune 500 list of the largest companies in America.
Neri has been talking to HPE customers and tells Fortune they are cautious about their tech spending plans. “They are staying the course. They are not pulling back,” he says. “They’re not increasing it right now, but definitely they’re looking at how to optimize those budgets.”
Neri, who became chief executive of the San Jose, California company, 18 months ago, still sees “big opportunities” even with all the economic uncertainty. In fact HPE, he says, has increased its research and development budget and is making acquisitions. In May, HPE bought Cray, the supercomputer pioneer.
Says Neri: “We are not slowing down at all.”
Watch the video above for more from my interview with Neri.