Hewlett Packard Enterprise Co reported a surprise rise in quarterly revenue, largely helped by higher sales of its networking equipment, sending its shares up more than 4 percent in extended trading on Tuesday.
Hewlett Packard Enterprise Co reported a surprise rise in quarterly revenue, largely helped by higher sales of its networking equipment, sending its shares up more than 4 percent in extended trading on Tuesday. 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. Total revenue in the company’s enterprise group division, which includes its storage and networking businesses, rose nearly 3 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. “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.
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 International Plc in an effort to beef up its cloud services for corporate computing. On Tuesday, Whitman joined a growing list of tech CEOs who opposed President Donald Trump’s decision to scrap the Deferred Action for Childhood Arrivals (DACA) program, which protects from deportation immigrants brought illegally in the United States as children.
“I am in support of DACA. I think it was the right position for these children who were brought here by their parents,” Whitman said in a interview to Reuters. 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.