Hewlett Packard (HPE) Q3 Earnings Beat, Revenues Miss Mark
Zacks Investment Research | Aug 27, 2019 10:43PM ET
Hewlett Packard Enterprise Company (NYSE:HPE) delivered third-quarter fiscal 2019 non-GAAP earnings of 45 cents per share, beating the Zacks Consensus Estimate of 40 cents as well as the year-ago quarter’s 42 cents.
However, net revenues of $7.22 billion declined 7% on a year-over-year basis and also missed the Zacks Consensus Estimate of $7.29 billion. In constant currency (cc), revenues slid 3% year over year.
Excluding Tier-1 server sales, revenues declined 3%. Notably, Tier 1 revenues plunged 30% and accounted for 2% of the top line, much lower than 5% in the year-ago quarter.
On the earnings call, management mentioned that deliberate actions through HPE Next including portfolio rationalization and some macroeconomic factors impacted results. Uneven demand due to the ongoing trade tensions between United States and China is a major overhang. Longer sales cycle for large enterprise deals is a headwind too.
However, the company’s organic investments in new products as well as strategic acquisitions enhance its ability to assist customers in their digital transformation journey, thereby aiding growth. Investments in high-performance compute, Hyper-converged Infrastructure, hybrid cloud and HPE GreenLake orders are key drivers. The company is also gaining traction from its strategic partnership with H3C.
Hewlett Packard Enterprise Company Price, Consensus and EPS Surprise
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