HP Enterprise Beats Expectations For Fiscal Third Quarter

Hewlett Packard Enterprise Co. (NYSE:HPE) reported better-than-expected quarterly earnings and revenue in its fiscal third quarter ended July 31. HPE said that it earned 31 cents a share for the quarter, which topped analysts’ forecasts of a profit of 26 cents a share. During the same period a year ago, the company earned 40 cents a share. HPE reported a 2.5 percent year-over-year rise in revenue to $8.21 billion, beating the average analyst estimate of $7.49 billion.

The data center technology company’s results were helped by higher sales of its networking equipment. Revenue from the company’s enterprise group division rose nearly 3 percent to $6.79 billion, beating the average analyst estimate of $6.37 billion. The division includes its storage and networking businesses and accounts for more than 75 percent of the company’s total revenue.

Among its enterprise offerings, HPE said sales of networking equipment climbed 16 percent, while storage revenue rose 11 percent over last year’s third quarter. Revenue from selling servers fell 1 percent, while software sales fell 3 percent. Financial services revenue climbed 10 percent year-over-year to $897 million.

HPE’s net income was partly affected by the spinoffs of its enterprise services business and its software business. Its software business was merged with British software company Micro Focus in a deal valued at $8.8 billion. Its enterprise services business was merged with Computer Sciences.

HPE cut its full-year earnings forecast as a result of the software spinoff. The company now expects full year earnings to fall into a range of $1.36 to $1.40 a share, down from a previous estimate of $1.46 to $1.56 a share. HPE said that it expects to earn between 26 cents and 30 cents a share for its fiscal fourth quarter, lower than analysts’ forecast of 40 cents a share in earnings for the period. The company’s shares rose as much as 5 percent in after-hours trading after the release of the earnings report.

Chief Executive Meg Whitman was asked on a conference call where she stands with regards to her position at HPE. Whitman, who had been a candidate for the CEO job at Uber, said, “I’ve dedicated the last six years of my life to this company. I actually am not going anywhere.”