Meg Whitman, CEO of HPE
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HPE reported a second quarter loss compared to a profit a year earlier.

By Reuters
Updated: May 31, 2017 4:25 PM ET

Hewlett Packard Enterprise on Wednesday reported a steep fall in revenue in its biggest business that sells servers, networking and data storage equipment, hurt by tepid demand, intense competition and a strong dollar.

Shares of Palo Alto, California-based HPE hpe fell 2.4% to $18.39 in trading after the bell.

Revenue in HPE’s enterprise group division, largely made up of its server and storage products, fell nearly 13% to $6.24 billion in the quarter ended April 30 — the steepest decline in several quarters.

Servers revenue dipped 14% to $2.99 billion, while networking revenue plunged 30%.

Under Chief Executive Meg Whitman, HPE has inked a string of deals to sharpen its focus on its hardware business that sells servers, networking and data storage equipment to companies.

HPE — created from the breakup of Hewlett-Packard in 2015 — has shrunk by divesting its technology services unit and signing a deal to sell its software division.

Last month, HPE bought data storage provider Nimble Storage Inc for $1.09 billion.

HPE’s results come following weak earnings reports from other big technology vendors including Cisco and IBM , which have faced slowing demand.

A strong dollar has eroded the value of HPE’s overseas revenue. HPE gets over 60% of its revenue from outside the United States.

The company reported a net loss of $612 million, or 37 cents per share in the second quarter ended April 30, compared to a profit of $320 million, or 18 cents per share, a year earlier.

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Revenue from continuing operations fell nearly 13% to $7.45 billion, largely reflecting the sale of its consulting and outsourcing services business.

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Excluding items, the company earned 35 cents per share, in line with analysts’ average expectation, according to Thomson Reuters I/B/E/S.

HPE’s shares had climbed 8.5% this year, slightly outperforming the S&P 500 index’s 7.7% gain.

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