Hewlett Packard Enterprise (HPE) reported strong performance in its fiscal second quarter, surpassing analysts’ estimates amid lowered expectations in the market. The company’s adjusted earnings came in at 38 cents per share, a 10% decline from the previous year, yet above the anticipated 33 cents. Revenue for the quarter reached $7.6 billion, marking a 6% increase compared to the same period last year, exceeding projections of $7.45 billion.
Key to HPE’s growth has been its data center business, particularly revenue from artificial intelligence-related servers and the increasingly popular HPE Greenlake cloud computing platform. Chief Financial Officer Marie Myers highlighted the company’s year-over-year revenue growth across servers, intelligent edge solutions, and hybrid cloud while noting improved margin performance within the server sector.
For the ongoing quarter ending in July, HPE projects adjusted earnings per share between 40 cents to 45 cents, slightly above the forecast of 41 cents, with expected revenue of $8.35 billion compared to estimates of $8.22 billion. Following the earnings report, HPE shares saw an increase of over 3% in extended trading, rebounding from a 17% decline earlier this year.
HPE’s plans for a $14 billion acquisition of Juniper Networks are still in motion despite a legal challenge from the Department of Justice aimed at halting the deal, which the DOJ argues would stifle competition. HPE maintains that it anticipates the acquisition will go through, which could solidify its position against competitors like Cisco Systems in the wireless LAN market.
This financial performance showcases HPE’s adaptability and resilience in a competitive landscape, with promising growth in core areas that strategize for future advancements, particularly in AI and hybrid cloud services.
Overall, this sets a positive tone for HPE as it continues to innovate and expand its service offerings.