Hewlett Packard Shares Climb On Better-Than-Expected Q2 Results

Hewlett Packard Enterprise Co HPE reported better-than-expected second-quarter financial results after the bell Tuesday. Here's a look at the highlights from the report. 

The Details: Hewlett Packard Enterprise reported quarterly earnings of 42 cents per share, which beat the analyst consensus estimate of 39 cents by 7.69%.

Quarterly sales clocked in at $7.2 billion which beat the analyst consensus estimate of $6.823 billion by 5.53% and represents growth of 3.26% over sales of $6.973 billion from the same period last year.

• Server revenue was $3.9 billion, up 18% from the prior-year period, with 11% operating profit margin, compared to 14.4% from the prior-year period.
• Intelligent Edge revenue was $1.1 billion, down 19% from the prior-year period, with 21.8% operating profit margin, compared to 24.7% in the prior-year period.
• Hybrid Cloud revenue was $1.3 billion, down 8% from the prior-year period, with 0.8% operating profit margin, compared to 1.9% from the prior-year period.
• Financial Services revenue was $867 million, up 1% from the prior-year period, with 9.3% operating profit margin, compared to 8.9% from the prior-year period. Net portfolio assets of $13.2 billion, down 1.1% from the prior-year period.

“HPE delivered very solid results in Q2, exceeding revenue and non-GAAP EPS guidance. AI systems revenue more than doubled from the prior quarter, driven by our strong order book and better conversion from our supply chain,” said Antonio Neri, president and CEO of Hewlett Packard Enterprise.

“Our deep expertise in designing, manufacturing, and running AI systems at scale fueled growth of cumulative AI systems orders to $4.6 billion, with enterprise AI orders representing more than 15%. HPE’s AI advantage, increased HPE GreenLake adoption, and leading infrastructure portfolio, as well as an improved supply chain environment, set us up very well to deliver a strong second half.”

Outlook: Hewlett Packard Enterprise sees third-quarter earnings of between 43 cents and 48 cents per share, versus the 47-cent estimate and third-quarter revenue in a range of $7.4 billion to $7.8 billion, versus the $7.46 billion estimate. The company sees full-year earnings between $1.85 and $1.95 per share, versus the $1.88 per share estimate.

HPE Price Action: According to Benzinga Pro, Hewlett Packard shares are up 9.86% after-hours at $19.33 at the time of publication Tuesday.

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