However, strength in Aruba Services, High Performance
Compute and Composable Cloud provide some optimism that revenues could see a
pickup. Last quarter, Aruba Services, Composable Cloud and HPE Nimble Storage
saw double-digit growth. The company has been focusing on more profitable
products and services and slowly moving away from low-margin businesses.
Last month, HPE stated that its strategy of investing in
high value, software-defined solutions had helped improve profitability across
the company over the past year. The company plans to offer the entire HPE
portfolio as-a-Service by fiscal year 2022 and sees solid market opportunity in
this space.
In the third quarter of 2019, HPE beat earnings expectations but missed revenue estimates. Revenues fell 7% to $7.2 billion while adjusted EPS rose 7% to $0.45.
Also read: Hewlett Packard Enterprises Q3 2019 Earnings Call Transcript
For the fourth quarter of 2019, HPE has guided for GAAP EPS
of $0.24-0.28 and adjusted EPS of $0.43-0.47. For the full year of 2019, the
company expects GAAP EPS to be approx. $0.65-0.69 and adjusted EPS to be approx.
$1.72-1.76.
Last month, HPE provided its outlook for fiscal year 2020. The
company expects adjusted EPS to be $1.78-1.94, up 7% year-over-year at the
mid-point and GAAP EPS to be approx. $1.01-1.17, up 63% year-over-year at the
mid-point. HPE
also increased its quarterly dividend to $0.12 per share.
Shares of Hewlett Packard Enterprises have gained 29% year-to-date and 31% over the past three months.