Hewlett Packard Enterprise (HPE) has released its financial results for the October quarter, which aligned closely with market expectations. The company's high-performance-computing and AI segment showed significant growth, particularly in the area of training large language models.
Revenue Performance
In the fourth quarter, HPE recorded revenue of $7.35 billion, representing a 7% decrease compared to the same period last year. This result fell within the company's projected range of $7.2 billion to $7.5 billion and was in line with the Street consensus of $7.36 billion.
Adjusted Profits
Adjusted profits for the quarter were 52 cents per share, marking a 9% decline from the previous year. Despite this decrease, the earnings exceeded the anticipated range of 48 to 52 cents per share. Analysts tracked by FactSet had predicted a consensus of 50 cents per share.
Strong Performance in the High-Performance Computing and AI Segment
HPE's high-performance-computing and AI segment, encompassing its supercomputing business, generated $1.18 billion in revenue during the quarter—a remarkable 37% increase. This figure greatly surpassed the Street consensus of $951 million.
Furthermore, CEO Antonio Neri revealed that this segment received orders worth $3.6 billion throughout the October 2023 fiscal year. Notably, $600 million of these orders were received within the final 10 days of that period. Among these orders was a significant deal with the U.K. government, worth approximately $285 million, to develop the country's fastest supercomputer.
While HPE has accumulated a substantial backlog of AI-related work, the majority of these orders have not yet been fulfilled.
Intelligent Edge Performance
HPE's "Intelligent Edge" business, primarily represented by its Aruba networking division, achieved quarterly revenue of $1.36 billion—an impressive 41% increase. However, this result fell just short of the consensus estimate of $1.44 billion. Although there was a slight deceleration in growth compared to the previous two quarters, it remained robust at 50%.
Overall, HPE's financial results highlight the company's growing strength in the high-performance-computing and AI segment, as well as its sustained progress in the Intelligent Edge market.
HP Enterprise Reports Revenue for 2024 Fiscal Year
HP Enterprise, a leading technology company, has released its financial results for the full fiscal year of 2024. Despite facing some challenges, the company managed to achieve growth in both revenue and profits.
Compute Segment Performance
The company's compute segment, which specializes in selling servers to data centers, generated $2.6 billion in revenue. Although this figure was 31% lower than expected, it only represented a 1% decrease compared to the previous quarter. Furthermore, sales in terms of units actually experienced a slight increase.
Storage Revenue
HP Enterprise's storage revenue reached $1.1 billion, slightly below estimates but 3% higher sequentially. This marked a 13% decrease from the previous year.
Overall Performance
In terms of overall performance, HP Enterprise recorded $29.1 billion in revenue for the full fiscal year, indicating a growth of 2% or 5.5% in constant currency. Adjusted profits per share were $2.15, representing a 6% increase. However, considering generally accepted accounting principles, the company's earnings were $1.54 per share.
Dividend Increase
Additionally, HP Enterprise announced an 8% increase in dividends, from 12 cents quarterly to 13 cents.
Future Projections
For the January quarter, HP Enterprise estimates revenue between $6.9 billion and $7.3 billion, slightly below the market consensus of $7.2 billion. The adjusted profit is projected to be between 42 and 50 cents per share, compared to the market consensus of 44 cents.
Looking ahead to the fiscal year of 2024, the company maintains its forecast of a 2% to 4% increase in top-line growth, along with an adjusted profit range of $1.82 to $2.02 per share. HP Enterprise also predicts a full-year free cash flow of $1.9 billion to $2.1 billion.
Stock Performance
HP Enterprise shares have experienced a decline of approximately 2% year-to-date.
