- Hewlett Packard Enterprise (HPE) has announced a profit forecast that beats Wall Street estimates — which was made during an earnings report where the company reported $7.22 billion in revenue
Today Hewlett Packard Enterprise (HPE) announced a profit forecast that beats Wall Street estimates. This announcement was made during an earnings report where the company reported $7.22 billion in revenue, which was slightly below analyst expectations. And HPE’s revenue declined 7% on an annualized basis in the fiscal third quarter ended July 31. This means that HPE’s revenue declined year-over-year for 3 consecutive quarters.
In terms of guidance, HPE raised full-year guidance to $1.72 to $1.76 in earnings per share excluding certain items according to CNBC. Analysts that were polled by Refinitiv were expecting $1.68 in earnings per share excluding certain items of the full fiscal year.
Most of HPE’s revenue comes from its Hybrid IT business — which includes servers, storage, and networking equipment for data centers. And that segment hit $5.55 billion in quarterly revenue for the third quarter, down 9% on an annualized basis.
As HPE CEO Antonio Neri has been steering the company to move towards a subscription-based model for its servers, storage hardware, networking equipment, and software by 2022.
“I would characterize the quarter as strong operational performance in an uneven market, driven by the macroeconomic challenges we’re all facing,” said Neri in an interview via Bloomberg. “The trade escalation continues to create uncertainty. Customers take a little bit longer to decide their investment strategy.”
Neri also set up a partnership with Google to help its customers adopt a hybrid model.
In Q3, HPE also made a one-time arbitration award to DXC, which is a company that was formed when HPE’s Enterprise Services Business spun out and merged with CSC in 2017.
And HPE also announced it is buying Cray in a deal valued at $1.3 billion. That deal is expected to close by the end of the 2019 fiscal year.
“While elongated sales cycles persist and remain more pronounced for large enterprise deals there are not materially worse than in June,” added HPE EVP and Chief Financial Officer Tarek A. Robbiati in a conference call today. “HPE’s broad portfolio and global footprint makes us well diversified to handle choppy markets. We have also been able to successfully navigate all of the recent tariff increases on China exports that have been factored into our outlook.”
