Hewlett Packard Enterprise Company (NYSE:HPE) Q3 2019 Earnings Conference Call - Final Transcript

Aug 27, 2019 • 05:00 pm ET

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Hewlett Packard Enterprise Company (NYSE:HPE) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Tarek Robbiati

$860 million in free cash flow that is up $790 million versus the prior year, driven primarily by higher profitability and lower one-time payments. Underpinning our year-to-date free cash flow performance is an over $900 million improvement in our cash flow from operations relative to last year. Consequently, at this stage, we believe that we can absorb the unexpected DXC award payment of $666 million to be made in Q4 within our existing full year outlook of $1.4 billion to $1.6 billion of free cash flow.

Slide 11 shows our capital returns to-date. As part of our continued $7 billion capital return plan through fiscal year '19, we returned $727 million to shareholders during the quarter. We paid $150 million in dividends and repurchased $577 million worth of shares in the quarter. On a year-to-date basis, we have returned approximately $2.4 billion to shareholders with $500 million in dividend and $1.9 billion in share repurchases.

Now turning to our outlook on Slide 12. As a reminder, at SAM, we originally guided our fiscal year '19 non-GAAP EPS outlook to be $1.51 to $1.61. Due to our strong non-GAAP EPS performance, we raised our full year EPS guidance by $0.05 in Q1, another $0.06 in Q2 to $1.62 to $1.72. With continued operational outperformance in Q3, we are again raising our EPS guidance for the full year. We now expect to finish fiscal year '19 with non-GAAP diluted net earnings per share of $1.72 to $1.76 and we expect our fiscal year '19 GAAP diluted net earnings per share to be $0.65 to $0.69.

This is now the seventh consecutive quarter that we are raising our non-GAAP EPS outlook. So overall, I'm pleased with the progress we continue to make on our revenue and margin transition. We will continue to execute against our strategy of shifting our portfolio towards profitable growth. That will drive our free cash flow and ultimately shareholder returns.

As Antonio mentioned, we look forward to having you join us at our Securities Analyst Meeting on October 23 in New York, where we will provide an update on our strategy and financial outlook. Now with that, let's open it up for questions.