Hewlett Packard Enterprise's second-quarter earnings guidance falls short of expectations, causing US stocks to drop nearly 19% after hours.

Hewlett Packard Enterprise released its first-quarter 2025 earnings, reporting adjusted EPS of $0.49, compared to the consensus of $0.50; net revenue of $7.85 billion, compared to the consensus of $7.81 billion. Server revenue was $4.29 billion, compared to the consensus of $4.25 billion. Net revenue from hybrid cloud was $1.41 billion, compared to the consensus of $1.43 billion.

Hewlett Packard Enterprise is advancing its cost-cutting plan by reducing its workforce. The company will cut 3,000 jobs due to the pressure on margins. The cost-cutting plan is expected to bring $350 million in cost savings in 2027.

Hewlett Packard Enterprise expects adjusted EPS of $0.28-$0.34 in the second quarter of 2025, compared to the consensus of $0.48. It expects net revenue of $7.2 billion-$7.6 billion in the second quarter, compared to the consensus of $7.94 billion.

Hewlett Packard Enterprise expects adjusted EPS of $1.70-$1.90 for the full year, compared to the consensus of $2.12. It expects free cash flow of about $1 billion for the full year, compared to the consensus of $2.51 billion. Hewlett Packard Enterprise' stock price fell nearly 19% after hours.