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HPE's Whitman: What earnings say about split

Meg Whitman: Investing in organic innovation is best

Splitting Hewlett-Packard was the right call and Hewlett Packard Enterprise's latest quarterly results justify that, HPE's CEO, Meg Whitman, said Friday.

"I went from running six businesses to focusing on three businesses. It means I spend the same amount of time with customers, it's just all talking about Hewlett Packard Enterprise, so customers feel like they get more attention," she told CNBC's "Squawk on the Street. "

"I think the strength of the quarter … does really lie on the premise of the split, which is two different businesses with more focus from senior leaders, more focus on our customers. I think it's at least the first proof point that this was the right thing to do."

On Thursday, Hewlett Packard Enterprise reported quarterly earnings and revenue that topped analysts' expectations.

The technology company posted adjusted fiscal first-quarter earnings of 41 cents per share on $12.72 billion in revenue. Analysts had expected HPE to report earnings of about 40 cents a share on $12.68 billion in revenue, according to a consensus estimate from Thomson Reuters.

Thursday's report marked the first time Hewlett Packard Enterprise announced financial results separately from HP — the other half of the company formerly known as Hewlett-Packard. Hewlett Packard Enterprise sells commercial computer systems, software and tech services, while HP sells personal computers and printers.

Shares in HPE were up nearly 15 percent midmorning Friday.

Meg Whitman, Chairman and CEO of Hewlett-Packard at the 2016 World Economic Forum in Davos, Switzerland.
David A. Grogan | CNBC

"During our first quarter as an independent company, we saw the progress that comes from being more focused and nimble," Whitman said in a statement. "We delivered a third consecutive quarter of year-over-year constant currency revenue growth, and excluding the impact of recent M&A activity, we saw revenue growth in constant currency across every business segment for the first time since 2010."

On a constant currency basis, first-quarter revenue increased 4 percent from the year-earlier period, but it fell about 3 percent without accounting for shifts in the U.S. dollar, HPE said.

Adjusted earnings per share saw a decline — down 7 percent from 44 cents during the same period in the prior year, the company said.

Looking ahead to the fiscal second quarter, HPE said it expects adjusted earnings between 39 cents and 43 cents per share — compared to a 42 cents average Wall Street estimate, according to Thomson Reuters.

For all of 2016, the company said it expects adjusted earnings between $1.85 and $1.95 per share. Wall street, according to Thomson Reuters, had expected $1.87 for the year.

The company also said it was increasing its commitment to return at least 100 percent of its free cash flow outlook to shareholders in the current fiscal year.

During the company's earnings call Thursday, Whitman updated investors and analysts on the status of the Tsinghua deal that was originally slated to close at the end of February.

"Now, we are confident that the deal's gonna close by the end of May. We're working through some Chinese regulatory approval," she said. The China Securities Regulatory Commission, that country's version of the Securities and Exchange Commission, recently removed Xiao Gang as chairman and replaced him with Liu Shiyu. Whitman said this has slowed down the approval process, adding that there is a backlog of deals that the CSRC is now working through.

Meg Whitman: HPE 'steady as she goes'

David Seaburg, managing director and head of sales and trading at Cowen and Co., told CNBC's "Closing Bell " on Thursday that he thinks the company split was a good move in the long run, but he doesn't see any real changes that would make him bullish on HPE.

"This is a name that people really hated into the quarter, very low expectations and maybe we would have seen a little bit of a short-covering bounce here. Maybe that's what we're gonna see, but again, it's not a name I want to put long-term money into, by any stretch of the imagination," he said.

Whitman has noted that Hewlett-Packard's split last year has helped the company zero in on its goals. "The benefit of focus in this split is something that I underestimated," she told CNBC's "Squawk Box " in January.

Though HP Inc. announced quarterly earnings last month that met analysts' expectations, revenue in its printing and personal systems segments fell slightly more than Wall Street had estimated.

— CNBC's Christine Wang contributed to this article.