Hewlett Packard Enterprise shares rose sharply on Wednesday after reporting earnings that met Wall Street's expectations and announced a spinoff of its enterprise services unit, which will merge with Computer Sciences.
The information technology company, itself a spinoff of the former Hewlett-Packard, posted adjusted earnings of 42 cents per share on $12.71 billion in sales for its fiscal second quarter on Tuesday. Profit fell 2 percent from 43 cents a year earlier, while revenue, which the company had struggled to increase, rose about 1 percent.
Analysts expected HPE to post earnings of 42 cents per share on $12.34 billion in revenue, according to a Thomson Reuters consensus estimate.
HPE shares spiked more than 11 percent in premarket trading Wednesday. Computer Sciences' stock soared as much as 30 percent.
The merger, which values HPE's services business at about $8.5 billion, is expected to be completed by the end of March 2017. HPE shareholders will own shares of both HPE and the combined company.