Hewlett-Packard Enterprise reported second quarter financial results Wednesday mired by a surprisingly large loss.
The company reported Q2 net loss of $612 million, or 29 cents a share, on revenue of $9.9 billion, including $7.4 billion from continuing operations and $2.5 billion associated with its discontinued Enterprise Services business. Excluding charges, HPE delivered earnings of 35 cents a share.
Wall Street was looking for second quarter non-GAAP earnings of 36 cents a share with $9.64 billion in revenue. HPE's share were down slightly after hours.
In a blog post, HPE CEO Meg Whitman said Q2 revenue was driven down "mainly by reduced server demand from a single Tier 1 customer, and lower license and professional services sales in software."
Whitman also said the company is taking a "fresh look" at its post spin-merge cost structure in order to optimize the business, streamline processes and reduce cost. Whitman said HPE can take out another $200 to $300 million in cost in the second half of the fiscal year.
"Despite some current headwinds, I remain confident in our strategy," Whitman said. "We will continue to invest in our three strategic pillars: hybrid IT, Intelligent Edge, and our Pointnext services model. And we will continue to find efficiencies and productivity in the new HPE that will allow us to run the company more profitably with each passing quarter."
Despite Whitman's optimism, HPE's revenue is down across the board.
Revenue for HPE's enterprise group was $6.2 billion, down 13 percent year-over-year. Servers revenue was down 14 percent, and storage revenue was down 13 percent. Networking revenue was down 30 percent, and technology services revenue, which includes HPE's new Pointnext services brand, was down two percent.
Software revenue was $685 million, down 11 percent year-over-year, license revenue was down 29 percent, and professional services revenue was down 17 percent. On the plus side, financial services revenue was $872 million, up 11 percent year-over-year.
In terms of outlook, HPE expects third quarter non-GAAP earnings between 24 cents and 28 cents a share. Analysts were expecting earnings of at least 31 cents a share. For the full year, HPE projected EPS of $1.46 to $1.56, which is in-line with current estimates.