Revenue during the quarter dropped 12.50 percent to $7,445 million from $8,509 million in the previous year period. Gross margin for the quarter contracted 193 basis points over the previous year period to 33.82 percent. Total expenses were 97.56 percent of quarterly revenues, up from 94.70 percent for the same period last year. That has resulted in a contraction of 286 basis points in operating margin to 2.44 percent.

Operating income for the quarter was $182 million, compared with $451 million in the previous year period.

However, the adjusted operating income for the quarter stood at $583 million compared to $773 million in the prior year period. At the same time, adjusted operating margin contracted 125 basis points in the quarter to 7.83 percent from 9.08 percent in the last year period.

“Despite some current headwinds, we delivered Q2 non-GAAP EPS in line with our outlook,” said Meg Whitman, President and Chief executive officer, Hewlett Packard Enterprise. “We saw strength in major components of our growth strategy, including high-performance compute, Aruba, all-flash storage and Technology Services. While we still have much more work to do, HPE’s Q2 results give me confidence that our efforts are delivering for customers and partners.”

The company forecasts diluted loss per share to be in the range of negative $0.02 to $0.02 for the third-quarter. For financial year 2017, the company forecasts diluted loss per share to be in the range of negative $0.03 to $0.07. On an adjusted basis, the company forecasts diluted earnings per share to be in the range of $0.24 to $0.28 for the third-quarter. For financial year 2017, the company forecasts diluted earnings per share to be in the range of $1.46 to $1.56 on adjusted basis.

The company has spent $3,810 million cash to meet investing activities during the first six months as against cash outgo of $1,121 million in the last year period. It has incurred net capital expenditure of $1,539 million on net basis during the first six months, up 13.83 percent or $187 million from year ago period.

The company has spent $248 million cash to carry out financing activities during the first six months as against cash outgo of $706 million in the last year period.

Cash and cash equivalents stood at $8,101 million as on Apr. 30, 2017, down 17.69 percent or $1,741 million from $9,842 million on Apr. 30, 2016.

Working capital drops significantly
Hewlett Packard Enterprise has witnessed a decline in the working capital over the last year. It stood at $2,695 million as at Apr. 30, 2017, down 74.45 percent or $7,855 million from $10,550 million on Apr. 30, 2016. Current ratio was at 1.15 as on Apr. 30, 2017, down from 1.51 on Apr. 30, 2016.

Cash conversion cycle (CCC) has decreased to 16 days for the quarter from 35 days for the last year period. Days sales outstanding went up to 89 days for the quarter compared with 83 days for the same period last year.

Days inventory outstanding has decreased to 18 days for the quarter compared with 37 days for the previous year period. At the same time, days payable outstanding went up to 91 days for the quarter from 84 for the same period last year.