Hewlett Packard Enterprise Co. posted a solid earnings beat and raised its outlook for its fiscal year today, sending its stock higher in extended trading.
The company reported fiscal first-quarter net income of $501 million, up from a $304 million net loss a year ago. Earnings before certain costs such as stock compensation came to 63 cents per share, while revenue rose 12%, to $7.8 billion.
Analysts had been targeting lower earnings of 54 cents per share on likewise lower sales of $7.45 billion. HPE’s stock, which had stayed flat during the regular trading session, rose by 2% after-hours.
HPE Chief Executive Antonio Neri (pictured) hailed the company’s “exceptional results,” noting that it delivered its highest first-quarter revenue since 2016 and its best-ever profit margin. “Powered by our market-leading hybrid cloud platform HPE GreenLake, we unlocked an impressive run rate of $1 billion in annualized revenue for the first time,” he added.
The company is a provider of information technology hardware such as servers, storage and networking gear, plus associated software services. Its flagship offering these days is GreenLake, a portfolio of hardware and software products that enterprises can buy on a pay-as-you-go basis, rather than purchase everything upfront.
That said, GreenLake’s revenue is split across multiple business segments, so it’s not easy to get a clear picture of how successful it really is. But its growth seems fairly evident, as HPE delivered across the board.
The best performer was its Higher Performance Computing & Artificial Intelligence group, which saw revenue rise 34%, to $1.1 billion in the quarter. Intelligent Edge revenue logged 25% growth from a year ago, to $1.1 billion. The Compute segment delivered the highest revenue at $3.5 billion, up 14%, while Storage revenue increased 5%, to $1.2 billion. HPE also derives revenue from Financial Services, which rose 4%, to $873 million.
With such impressive growth across the board, HPE officials are confident they can continue to deliver, and that was reflected in its guidance for the coming quarter. The company is forecasting earnings of between 44 and 52 cents per share on revenue of $7.1 billion to $7.5 billion, nicely ahead of Wall Street’s forecast of 47 cents a share in earnings and $7.04 billion in sales.
HPE also raised its full-year earnings outlook, saying it now sees a profit of between $2.02 and $2.10 per share, up from its earlier range of $1.96 to $2.04. Wall Street is targeting full-year earnings of $2.02 per share.
The company was fairly busy on the acquisition front in the last quarter, announcing in January it had bought an AI startup called Pachyderm Inc. and following up in February with the news that it had agreed to a deal to buy the private cellular network provider Athonet Srl. However, a much bigger potential acquisition is apparently off the table, as officials denied the company was holding talks with Nutanix Inc. about a possible sale.