HPE Posts Quarterly Results Ahead of Estimates

HPE reported its third fiscal quarter financial results that are slightly ahead of market expectations. The company benefited from solid growth in its as-a-service efforts, including its GreenLake services.

"Our Q3 results are marked by strong execution and sequential growth," said Antonio Neri, president and CEO of Hewlett Packard Enterprise. "We significantly improved operational and supply chain execution and advanced our innovation agenda with the introduction of HPE GreenLake cloud services solutions, our new HPE Ezmeral software portfolio, and our planned acquisition of SD-WAN leader Silver Peak.

Net revenue of $6.8 billion was down 6% from the prior-year period or 4% when adjusted for currency. Revenue grew 13% sequentially (14% adjusted for currency) driven by solid execution in clearing historic backlog by approximately $500 million during the quarter. Gross Profit of $2.1 billion was up 8% sequentially due to strong operation execution.

HPE's non-GAAP earnings came to 32 cents per share, down 6 percent from the prior-year period. Analysts were expecting earnings of 23 cents per share. The company grew its annualized revenue run-rate to $528 million, up 11 percent from the prior-year period. GreenLake services orders finished the quarter with a record 80 percent year-over-year growth. HPE signed several of its largest ever GreenLake cloud services deals in Q3.

Compute revenue came to $3.4 billion, flat year-over-year. Growth in compute was driven by the reduction in backlog and customer demand in virtual desktop infrastructure solutions. Storage revenue was $1.1 billion, down 10 percent year-over-year, while Financial Services revenue came to $811 million, down 9 percent. High Performance Compute & Mission Critical Systems revenue was $649 million, up 3 percent from the prior-year period. Intelligent Edge revenue was $684 million, down 12 percent year-over-year.

HPE also announced a Q4 dividend of 12 cents a share, payable on October 7. For the fourth quarter, the company estimates non-GAAP diluted net EPS to be in the range of 32 cents to 36 cents.