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HPE surprises with results

by on06 September 2017


Networking means outfit does better than expected


Hewlett Packard Enterprise reported a surprise rise in quarterly revenue, largely helped by higher sales of its networking equipment.

 

Total revenue in the company’s enterprise group division, which includes its storage and networking businesses, rose nearly three percent to $6.79 billion in the third quarter ended July 31.

Revenue from the unit, which accounted for more than three-fourths of total revenue, beat the average analyst estimate of $6.37 billion, according to financial data and analytics firm FactSet.

Within the enterprise group, networking revenue, which included switches, routers and wireless local area network devices, jumped 16 percent and storage revenue 11 percent.

HPE Chief Executive Meg Whitman has been focusing on a few areas such as networking, storage and technology services ever since HPE was spun off from Hewlett-Packard Co in 2015.

“Aruba continues to perform exceptionally well,” said Whitman said on a post-earnings call. “Aruba continues to take share from competitors like Cisco.”

Wi-Fi network gear maker Aruba Networks was bought by Hewlett-Packard Co in 2015. 

HPE said it expected current-quarter profit to be in the range of 26 to 30 cents per share, below analysts’ average estimate of 40 cents, according to Thomson Reuters I/B/E/S.

The company also lowered its full-year profit forecast to the range of $1.36 to $1.40 per share from $1.46 to $1.56 per share, largely affected by costs from the spinoffs of its enterprise services and software businesses.

Earlier this month, HPE spun-off its enterprise software businesses to British software company MicroFocus in an effort to beef up its cloud services for corporate computing.

HPE reported a 2.5 percent rise in quarterly revenue to $8.21 billion, above the analysts’ average estimate of $7.49 billion.

However, net income fell to $165 million, or 10 cents per share from $2.27 billion, or $1.32 per share, a year earlier.

Excluding items, the company earned 30 cents per share. The company’s shares, which closed down 2 percent in regular trading, were at $14.65.

Last modified on 06 September 2017
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