The Coronavirus pandemic is having a strong negative effect on the fiscal status of many companies. Due to lockdowns around the world, businesses are finding it hard to generate revenue. People are looking to hold on to their money right now. Thus, any company that sells non-essential goods is seeing its revenue fall.
IT companies are also facing problems like many other industries. These companies depend on providing services to other companies for revenue. Since other businesses are also struggling, it is having a bad effect on IT companies also. Hewlett Packard Enterprise is one of the IT companies that have been having problems over the past few months.
HP Enterprise Stock Falls
The company was having a fairly stable day in the market on Thursday, 21 May 2020. The stock had opened at a price of 10.25 USD. It rose a little through the day and closed the day at a price of 10.36 USD. This was 0.080 USD higher than the previous closing price.
But the stock then plunged in after-hours trading in the US market. The stock fell to 9.80 USD in extended trading from its closing price of 10.36 USD. This was a fall of around 5% after-hours as investors went bearish on the stock.
Why Did The Stock Fall?
The stock fell in extended trading after HP Enterprise reported its second fiscal quarter earnings. The company had a loss of $821 million in the quarter. This was against earnings of $6.01 Billion. These results, however, were far away from the estimates of Wall Street Analysts.
The company’s revenue is down from$7.15 Billion in the same quarter last year. The company only has earnings of 22 cents per share, compared to 42 cents per share last year. Analysts were expecting sales of $6.33 Billion in the quarter. But due to the company falling short of expectations and reporting large losses, the stock proceeded to fall in extended trading.
What’s Next For HP Enterprise?
The company has not given any financial guidance with its earnings reports. Officials from the company are highlighting supply chain problems due to the Covid-19 pandemic as the big reason behind the losses. The company has stated that it is committed to alleviating uncertainty over the coming few months and ensure that the company handles the pandemic better from now. HP is planning to make significant changes to its workforce and payroll structure to cut $1 Billion in future costs.