HPE Announces Fiscal Year 2017 Outlook - Seite 3

FY17 reported free cash flow will also be reduced from the normalized level due to the partial year contribution from ES and Software, previously announced restructuring and separation payments, and a $2.5 billion payment to fund the ES pension associated with the spin-merge. Given these factors, HPE expects to deliver negative free cash flow of approximately $1.8 billion in FY17. 

While HPE's FY17 free cash flow will be negative due to the pension funding payment, the operating company's net cash level on its balance sheet is expected to increase from approximately $7 billion at the end of FY16 to approximately $11 billion in FY17, primarily due to the ES and Software transactions and the underlying strength of HPE's normalized free cash flow engine. With this in mind, the company is committed to returning approximately $3 billion in total to shareholders in FY17, and will end the year with an operating company net cash balance of approximately $8 billion. In addition, the company expects cash flow to approach normalized levels in FY18. 

"In FY17, we will maintain our disciplined capital allocation framework, with a bias towards share repurchases," said Stonesifer in his remarks. "Given our strong cash position today, the cash we will receive from the ES and Software transactions, and the underlying strength of our normalized free cash flow engine, we are committed to returning approximately $3 billion in total to shareholders in FY17." 

Future HPE Outlook
Stonesifer also discussed how HPE's financial profile will be improved following the completion of the ES and Software transactions, and provided an outlook for the future HPE, excluding ES and Software for the full year. The future HPE is expected to see modest revenue growth in FY17. Non-GAAP EPS would be approximately $1.25 to $1.35 in FY17 with GAAP EPS of $0.29 to $0.39. On a normalized basis, the company expects free cash flow to be approximately $2.1 to $2.4 billion. 

"HPE's financial profile will be improved following the ES and Software transactions," Stonesifer continued. "HPE will be a faster growing, higher margin company, with strong cash flow in FY18 and beyond."

Business Updates

Enterprise Group
In his presentation, Antonio Neri, EVP and GM of the Enterprise Group, recapped EG's solid performance to date in FY16, outlined a clear strategy aligned to market opportunities and customer needs, and described the steps the business is taking to optimize its operating model and deliver strong profitability.