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Hewlett Packard Enterprise: Company Analysis

The Hewlett Packard Enterprise’s (HPE) latest fiscal year report provides substantial information about the financial results and their implications for the future of the company. The tone in which the company representatives choose to communicate the business results to their shareholders is respectful and optimistic. Since HPE is interested in the further development of its operations, it accentuates the advantages of the business to reassure its current and attract potential investment community. As it is seen from the press release, the most important message that the company wants to be noticed by the shareholders is the revenue and the increased diluted net earnings per share (“HPE Reports Fiscal 2019 Fourth Quarter and Full-Year Results. Press Release,” 2019).

The CEO of the enterprise makes the optimistic statements using such phrases as “we had a very successful fiscal year” and “I am confident in our ability to drive sustainable, profitable growth as we continue to shift our portfolio to higher-value … solutions” (“HPE Reports Fiscal 2019 Fourth Quarter and Full-Year Results. Press Release,” 2019, para. 6). Overall, HPE publicly reports positive outcomes of its performance by highlighting ambitious plans for the future.

When comparing the analysis of the HPE’s annual report with the company’s public representation of its financial outcomes, one might identify that there are some inconsistencies in the style of presentation of the results and their actual implications. For example, the profitability ratios regarding equity are continuously decreasing and have shown to fall during the last fiscal year, which signalizes failure to sustain development. However, HPE’s press release claims that the company ensures sustainable growth.

At the same time, the company’s annual report matches its news release in terms of exact indication of the net revenue, which decreased in comparison to the previous year (“HPE Reports Fiscal 2019 Fourth Quarter and Full-Year Results. News Release,” 2019). Overall, the company is partially consistent in delivering information about its financial performance through its annual report and the public description.

To exemplify several issues that are particularly underlined by HPE in its announcement, one might refer to the rations with which the report is opened. Indeed, the information at the beginning of the news release demonstrates the revenue for the fourth quarter ($7.1 billion) and then for the last year ($29.1 billion) (“HPE Reports Fiscal 2019 Fourth Quarter and Full-Year Results. News Release,” 2019). Importantly, the highlights do not indicate the decline in revenues in comparison to the previous fiscal period. In its public report, the company emphasizes its increased cash flow as a significant breakthrough that is aimed at attracting more investment. In such a manner, the public presentation is aimed at attracting attention to the beneficial issues while diminishing the level of relevance of some significant underachievement that might play a destructive role in the enterprise’s future.

Nonetheless, despite the overall unstable performance of the enterprise in the context of the technologies industry, it has its advantages. Some of them are the flexibility in the decision-making of the leaders of the company, innovative solutions, and readiness for cultural transformations. Although there are problems with financial sustainability and assets management, the company seems to learn from its experience and applies effective strategies to use its positive achievements (revenue and cash flow) as a method of attraction of more investment. These advantages will help the company to improve its financial performance within the vulnerable ratios and compete with other entities in the marketplace.

In conclusion, the company’s performance must be judged based on the objective indicators representing the financial outcomes. When it comes to making a decision on whether to invest in the company, the investors should prioritize the ratio analysis over the public representation of HPE’s performance over the last year. Since the crucial indicators such as the profitability ratios regarding equity and net revenue continuously decrease, it is not recommended to invest in the company at this point. The objective analysis of the company’s performance demonstrates HPE’s current inability to sustain development.

References

HPE Reports Fiscal 2019 Fourth Quarter and Full-Year Results. News Release. (2019). Web.

HPE Reports Fiscal 2019 Fourth Quarter and Full-Year Results. Press Release. (2019). Web.

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