HPE Surprises With Revenue Gain After Slimming Down

HPE Surprises With Revenue Gain After Slimming Down

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Hewlett Packard Enterprise is emerging from an aggressive effort to slim down, reporting stronger-than-projected quarterly sales on healthier demand for servers and storage gear that help run data centers, according to Bloomberg.

Revenue rose 2.5 percent to $8.2 billion in the fiscal third quarter, marking the first time in five quarters the corporate technology company beat analysts’ sales estimates. Adjusted profit was 30 cents a share, the company said in a statement.

In the face of competition from cloud computing providers, CEO Meg Whitman has spent much of the past two years shrinking her company, trying to make it more responsive to key markets. That process began with the split from HP, the maker of printers and computers, in late 2015, and continued this year by separating from its large services and software businesses.

Profit excluding some costs will be 26 cents to 30 cents a share in the current quarter, HPE said in the statement. The company reduced its fiscal year outlook to account for the separation of the software business, saying adjusted profit will be $1.36 to $1.40 a share.

Revenue in the storage business rose 11 percent in the fiscal third quarter, which ended July 31. Sales of servers, the computing engine for data centers, declined 1 percent. Networking business revenue rose 16 percent, the company said.

During a call with analysts, Whitman said the company is benefiting from growing demand across key areas of the business, including servers. At the same time, she is pushing to cut “layers” in the organization and become more efficient.

While narrowing the company’s focus, Whitman has kept making acquisitions. Earlier, HPE announced it would buy Cloud Technology Partners, which helps businesses transition some of their applications to providers such as Amazon’s Web Services.

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