Tag Archives: hpe

ServiceNow May Settle Some Patent Litigation With BMC Software

ServiceNow ( NOW ) stock rose Tuesday, with word out that it might be able to settle some of its patent litigation with privately held BMC Software, avoiding a trial scheduled to start Friday. A cloud-based business software rival of SAP ( SAP ) and Salesforce.com ( CRM ), ServiceNow shares were up more than 4% in afternoon trading in the stock market today , near 60.70. William Blair analyst Justin Furby suggested the possible settlement may “be a mild positive, as the prospect of a jury trial and the potential appeals process … would have likely created overhang on the stock. “More importantly, until this point, we believe the litigation has not affected ServiceNow’s sales cycles,” Furby wrote in a research note Tuesday. But the increased public attention of a trial “could have delayed sales for SerivceNow, particularly if the court would have ruled in BMC’s favor. “Lastly, BMC had sought injunctive relief, and had the lawsuit and subsequent appeals process gone against ServiceNow, it could have faced the prospect of discontinuing or rewriting certain of its applications,” Furby said. BMC sued ServiceNow in September 2014, claiming seven patent violations. Courts dismissed two claims, and BMC withdrew a third. But last month, BMC filed a second lawsuit against ServiceNow, claiming infringement of five patents, two of which were included in the original litigation, Furby said, adding that he didn’t know if the proposed settlement included this second case. He said he spoke with someone at ServiceNow who told him that “all matters in controversy between the parties have been settled, in principle.” ServiceNow did not immediately respond to IBD’s request for comment. The four remaining claims of the original lawsuit involve “managing a computer network via hierarchy,” collecting performance management data, determining the root cause of a problem, and “spotlight visualization” for IT service models, Furby noted. Hewlett Packard Also Suing ServiceNow As for separate litigation filed against ServiceNow in February 2014 by the former Hewlett-Packard Co. — now represented in the action by  Hewlett Packard Enterprise ( HPE ) — claiming eight patent infringements, the court threw out four claims, stayed litigation on two, and scheduled an April 29 hearing and a May 22, 2017, trial date for the remaining two claims, Furby said. “The BMC settlement has yet to be finalized, and we are unclear what the amount will be and whether ServiceNow will be paying ongoing licensing fees to BMC as part of a potential settlement,” Furby wrote. ServiceNow has not been accruing reserves for damages but has been “expensing significant ongoing attorney fees … incorporated into guidance,” he said. Furby put the company’s net cash pile at about $700 million and estimated $325 million in free cash flow in 2016 prior to any settlement. ServiceNow stock is trading 34% off a record high 91.28 set Dec. 4. Its stock plunged 15.7% on Jan. 28 after reporting billings below expectations, although fourth-quarter non-GAAP EPS was up 533% to 19 cents, doubling analysts’ consensus, and revenue was up 44% to $285.6 million, also topping Wall Street. The IBD Computer Software-Enterprise industry group, led by SAP and Salesforce.com, has fallen 18% from its November highs. With $91.9 billion in market cap, SAP leads the group, followed by Salesforce’s $46.8 billion market value. ServiceNow’s market cap stands at $9.6 billion. Shares of SAP and  Salesforce were up a fraction Tuesday afternoon, but Hewlett Packard Enterprise stock was down 2.5%.

Hewlett Packard Enterprise Jumps 15% As Earnings Edge Views

Hewlett Packard Enterprise ( HPE ) stock rocketed 15% in morning trading on the stock market today . Late Thursday HPE edged above earnings-per-share expectations for its fiscal Q1 ended Jan. 31, met on revenue and roughly met views with its Q2 earnings guidance, while also promising to return more capital to shareholders. For Q1, the company posted EPS ex items of 41 cents, down 6.8% from pro forma earnings of 44 cents a share in the year-earlier quarter. Sales fell 3% to $12.7 billion. For Q2, HPE expects EPS ex items of 39 cents to 43 cents. It didn’t give revenue guidance. “All in all, the headline news looks like a solid report from a top/bottom-line perspective,” Daniel Morgan, a vice president of HPE shareholder Synovus Trust, told IBD via email. On Wednesday, the company filed with the SEC to change its pro forma figures for the year-earlier quarter, which it issued after its Nov. 1 split from the legacy Silicon Valley pioneer Hewlett-Packard Co. HPE contains the business software and services, servers, storage and cloud-migration operations of the old company, with the new HP Inc. ( HPQ ) taking the PC and printer business. HPE now has more freedom to battle broad-based business-technology providers such as IBM ( IBM ), Cisco Systems ( CSCO ) and Oracle ( ORCL ). HPE changed its year-earlier figure for EPS minus items to 44 cents, from 48 cents. It didn’t change its pro forma revenue figure. Analysts polled by Thomson Reuters had expected adjusted EPS of 40 cents for fiscal Q1, though it’s unclear if that consensus estimate would have changed with the new pro forma figure. Analysts expected revenue of $12.68 billion. For Q2, analysts had modeled EPS ex items of 42 cents on sales of $12.3 billion. The company’s fiscal 2016 EPS ex items guidance of $1.85 to $1.95 met the views of analysts polled by Thomson Reuters. And HPE maintained its fiscal 2016 guidance on free cash flow — cash from operations minus capital expenditures — of $2 billion to $2.2 billion. HPE shares fell 2.2% to 13.60 Thursday. The stock, which debuted in early November, peaked Dec. 1 at 15.88. Looking for ways to speed growth and improve shareholder value, the Hewlett-Packard split came in the face of faster-growing competition from upstarts leading the way to cloud computing. Last week, HP Inc. said its Q1 EPS and sales each fell 12%, to 36 cents and $12.2 billion. HPE Says Sales In Constant Currency Rose For All Segments “During our first quarter as an independent company, we saw the progress that comes from being more focused and nimble,” HPE CEO Meg Whitman said in the company’s earnings release. Whitman also serves as chair of HP Inc. and had been CEO and chairwoman of the former Hewlett-Packard Co. before engineering the split-up. “We delivered a third consecutive quarter of year-over-year constant-current revenue growth, and excluding the impact of recent M&A activity, we saw revenue growth in constant currency across every business segment for the first time since 2010,” she said. Revenue rose 4% year over year in constant currency, the company said. HPE CFO Tim Stonesifer said in the earnings release that the company will “return at least 100% of our free cash flow outlook to shareholders” in fiscal 2016, after devoting $1.3 billion to share repurchases and dividends in Q1. The networking business was the clear winner last quarter, and in fact the only business that notched revenue growth. The company said its Enterprise Group overall rose 1% to $7.1 billion in revenue, with a 13.4% operating margin. Networking sales jumped 54% from the year-earlier quarter — more than 60% in constant currency — but storage revenue fell 3%, and tech services tumbled 9%. Also slipping were server sales, albeit by just 1%. Before the release, shareholder Morgan, of Synovus Trust, told IBD he was “looking for stabilization in areas of weakness (by) expecting strength in servers into next year, as cloud and Big Data growth spur purchases. Servers represents 48% of the Enterprise (Group) segment’s revenue and was (up) 5% year-to-year last quarter.” HPE’s separate Enterprise Services segment sales fell 6% to $4.7 billion, the company said. Infrastructure tech outsourcing sales fell 8%, while application and business services revenue slipped 3%. Software services fell 10% to $780 million. License revenue fell 6%, support fell 13%, professional services revenue contracted 7%, and software as a service (Saas) sales fell 9%. Financial services, which help customers pay for their purchases, fell 3% to $776 million. In its filing with the SEC on Wednesday, the company said the main differences with its new pro forma EPS number for the year-earlier quarter “are related to cash acquired and debt incurred by HPE just prior to the distribution (of new shares to old shareholders). The primary differences between the previously provided figures and adjusted cash flow from operations and adjusted free cash flow are related to prepaids, deposits and liabilities associated with property, plant and equipment, pension obligations and income tax asset and liabilities that transferred to HPE from its former parent just prior to the distribution.”

Hewlett Packard Enterprise Edges EPS Views, Outlook Meets, Stock Up

Hewlett Packard Enterprise ( HPE ) late Thursday edged above earnings-per-share expectations for its fiscal Q1 ended Jan. 31, met on revenue and roughly met views with its Q2 earnings guidance, while also promising to return more capital to shareholders. For Q1, the company posted EPS ex items of 41 cents, down 6.8% from pro forma earnings of 44 cents a share in the year-earlier quarter. Sales fell 3% to $12.7 billion. For Q2, HPE expects EPS ex items of 39 cents to 43 cents. It didn’t give revenue guidance. “All in all, the headline news looks like a solid report from a top/bottom-line perspective,” Daniel Morgan, a vice president of HPE shareholder Synovus Trust, told IBD via email. On Wednesday, the company filed with the SEC to change its pro forma figures for the year-earlier quarter, which it issued after its Nov. 1 split from the legacy Silicon Valley pioneer Hewlett-Packard Co. HPE contains the business software and services, servers, storage and cloud-migration operations of the old company, with the new HP Inc. ( HPQ ) taking the PC and printer business. HPE now has more freedom to battle broad-based business-technology providers such as IBM ( IBM ), Cisco Systems ( CSCO ) and Oracle ( ORCL ). HPE changed its year-earlier figure for EPS minus items to 44 cents, from 48 cents. It didn’t change its pro forma revenue figure. Analysts polled by Thomson Reuters had expected adjusted EPS of 40 cents for fiscal Q1, though it’s unclear if that consensus estimate would have changed with the new pro forma figure. Analysts expected revenue of $12.68 billion. For Q2, analysts had modeled EPS ex items of 42 cents on sales of $12.3 billion. The company’s fiscal 2016 EPS ex items guidance of $1.85 to $1.95 met the views of analysts polled by Thomson Reuters. And HPE maintained its fiscal 2016 guidance on free cash flow — cash from operations minus capital expenditures — of $2 billion to $2.2 billion. HPE stock was up nearly 7% in after-hours trading, following the earnings release. Shares fell 2.2% to 13.60 in the regular session on the stock market today . The stock, which debuted in early November, peaked Dec. 1 at 15.88. Looking for ways to speed growth and improve shareholder value, the Hewlett-Packard split came in the face of faster-growing competition from upstarts leading the way to cloud computing. Last week, HP Inc. said its Q1 EPS and sales each fell 12%, to 36 cents and $12.2 billion. HPE Says Sales In Constant Currency Rose For All Segments “During our first quarter as an independent company, we saw the progress that comes from being more focused and nimble,” HPE CEO Meg Whitman said in the company’s earnings release. Whitman also serves as chair of HP Inc. and had been CEO and chairwoman of the former Hewlett-Packard Co. before engineering the split-up. “We delivered a third consecutive quarter of year-over-year constant-current revenue growth, and excluding the impact of recent M&A activity, we saw revenue growth in constant currency across every business segment for the first time since 2010,” she said. Revenue rose 4% year over year in constant currency, the company said. HPE CFO Tim Stonesifer said in the earnings release that the company will “return at least 100% of our free cash flow outlook to shareholders” in fiscal 2016, after devoting $1.3 billion to share repurchases and dividends in Q1. The networking business was the clear winner last quarter, and in fact the only business that notched revenue growth. The company said its Enterprise Group overall rose 1% to $7.1 billion in revenue, with a 13.4% operating margin. Networking sales jumped 54% from the year-earlier quarter — more than 60% in constant currency — but storage revenue fell 3%, and tech services tumbled 9%. Also slipping were server sales, albeit by just 1%. Before the release, shareholder Morgan, of Synovus Trust, told IBD he was “looking for stabilization in areas of weakness (by) expecting strength in servers into next year, as cloud and Big Data growth spur purchases. Servers represents 48% of the Enterprise (Group) segment’s revenue and was (up) 5% year-to-year last quarter.” HPE’s separate Enterprise Services segment sales fell 6% to $4.7 billion, the company said. Infrastructure tech outsourcing sales fell 8%, while application and business services revenue slipped 3%. Software services fell 10% to $780 million. License revenue fell 6%, support fell 13%, professional services revenue contracted 7%, and software as a service (Saas) sales fell 9%. Financial services, which help customers pay for their purchases, fell 3% to $776 million. In its filing with the SEC on Wednesday, the company said the main differences with its new pro forma EPS number for the year-earlier quarter “are related to cash acquired and debt incurred by HPE just prior to the distribution (of new shares to old shareholders). The primary differences between the previously provided figures and adjusted cash flow from operations and adjusted free cash flow are related to prepaids, deposits and liabilities associated with property, plant and equipment, pension obligations and income tax asset and liabilities that transferred to HPE from its former parent just prior to the distribution.”