Hewlett Packard Enterprise (HPE) has reported better-than-expected quarterly financial results in its first earnings report since completing its $14 billion purchase of Juniper Networks.
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HPE announced Fiscal third-quarter earnings per share (EPS) of $0.44, which beat Wall Street forecasts of $0.42. Revenue in the period of $9.14 billion surpassed the $8.84 billion consensus estimate of analysts. The strong print was mostly due to robust sales in the company’s server and networking segments.
HPE makes most of its revenue from its server business. At $4.94 billion, server revenue for the just completed quarter beat Wall Street’s consensus forecast of $4.72 billion. HPE completed its acquisition of Juniper Networks on July 2, a deal that aims to create a networking business capable of competing against archrival Cisco Systems (CSCO).
HPE’s income statement. Source: Main Street Data
Forward Guidance
Looking ahead, Hewlett Packard Enterprise said that it expects earnings in the current quarter of $0.56 to $0.60 a share, which is above a consensus estimate of $0.56. Management also forecast revenue between $9.7 billion and $10.1 billion, which is just shy of Wall Street expectations for $10.11 billion in sales.
For the entire Fiscal year, HPE now expects earnings of $1.88 to $1.92 a share, and for revenue to grow between 14% and 16%. The company previously forecast earnings of $1.78 to $1.90 a share, with revenue growth of 7% to 9%.
Is HPE Stock a Buy?
The stock of Hewlett Packard Enterprise has a consensus Moderate Buy rating among 16 Wall Street analysts. That rating is based on nine Buy and seven Hold recommendations issued in the last three months. The average HPE price target of $25 implies 9.15% upside from current levels. These ratings are likely to change after the company’s financial results.
