Hewlett Packard Enterprise (HPE) stock plummeted in after-hours trading on Thursday after the company reported fiscal Q1 results that missed earnings estimates and provided disappointing guidance for Q2 and the full year, citing uncertainty from U.S. tariffs impacting its server business. The tech giant also announced plans to cut around 5% of its global workforce as part of a cost reduction program aimed at delivering $350 million in savings by fiscal 2027.

For the first quarter ended January 31, HPE reported revenue of $7.85 billion, up 16% year-over-year, and adjusted earnings per share of $0.49, in line with the previous year. While revenue slightly beat estimates, earnings fell short of analysts' expectations of $0.50 per share.

However, the company's outlook for the second quarter and full fiscal year 2025 was significantly weaker than anticipated. HPE projected Q2 revenue in the range of $7.2 billion to $7.6 billion, well below analysts' consensus estimate of $7.93 billion. Adjusted earnings per share for Q2 are expected to be between $0.28 and $0.34, compared to the $0.50 estimate.

For the full fiscal year 2025, HPE forecasts revenue growth of 7% to 11%, implying adjusted earnings per share of $1.70 to $1.90, missing the $2.13 consensus estimate.

The lackluster guidance was attributed to the ongoing trade tensions and tariff uncertainty, which have created challenges for HPE's server and data center business. The company expects to adjust product prices and leverage its global supply chain to mitigate the impact of tariffs, but acknowledged that the situation is fluid and could have a more significant effect in the near term.