Information technology giant Hewlett Packard Enterprise (NYSE: HPE) reported second-quarter revenues that missed the street consensus, even as the bottom-line came in stronger than expected. Meanwhile, the company raised its full-year EPS guidance, triggering a stock gain of 3.9% during the aftermarket hours.
Revenues for the quarter edged down 4% to $7.2 billion, missing the average analysts’ consensus of $7.44 billion. On the other hand, adjusted net income increased to 42 cents per share from 32 cents per share last year. Analysts were expecting earnings of just 36 cents per share in the second quarter.
CEO Antonio Neri said, “In Q2 we demonstrated traction in critical areas for our customers that delivered strong margin improvement, EPS above our outlook and solid cash flow.”
Raised outlook
For fiscal 2019, HPE now estimates GAAP EPS in the range of $0.98 to $1.08. This compares with the earlier projection of $0.88 to $0.98. Adjusted EPS outlook was raised to $1.62 to $1.72, from the prior guidance of $1.56 to $1.66.
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For the third quarter, Hewlett Packard expects GAAP EPS of $0.29 to $0.33, while adjusted EPS is projected to be $0.40 to $0.44.
Hewlett Packard has been on a mission to diversify its portfolio. The most recent move in this regard is the acquisition of Cray (NASDAQ: CRAY) for about $1.30 billion, which gives HPE a leeway into the supercomputer business.
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The deal values Cray’s stock at $35, representing a premium of about 17%, and is tentatively scheduled to close early next year. It is expected to be accretive to HPE’s adjusted earnings after one full year of completion.
The acquisition is meaningful in a way that it helps HPE stay relevant in a competitive market that is dominated by the likes of International Business Machines (NYSE: IBM).