HPE rises on revenue growth

Key Points
  • Hewlett Packard Enterprise beat on earnings and revenue in the quarter.
  • The company appointed a new chief financial officer, Tarek Robbiati.
Antonio Neri, CEO of Hewlett Packard Enterprise, speaks at the 2017 HP Discover 2017 conference in Las Vegas.
Bloomberg | Getty Images

Hewlett Packard Enterprise stock rose on Tuesday after the company reported better-than-expected earnings for the third quarter of its 2018 fiscal year, which ended on July 31.

Here's how HPE did in the quarter:

  • Earnings: 44 cents per share, excluding certain items, vs. 37 cents as expected by analysts, according to Thomson Reuters.
  • Revenue: $7.76 billion, vs. $7.68 billion as expected by analysts, according to Thomson Reuters.

Overall, HPE's revenue was up 3.5 percent year over year, according to a statement.

The biggest portion of HPE's revenue comes from its Hybrid IT business segment -- including compute, storage, and data center networking products -- came in at $6.24 billion, above the FactSet analyst consensus of $6.16 billion. The Intelligent Edge segment, including Aruba, came in at $785 million, above the FactSet analyst consensus of $766.3 million.

HP posts strong third quarter earnings beat
HP posts strong third quarter earnings beat

With respect to guidance, HPE said it's expecting to report 39 to 44 cents in earnings per share, excluding certain items, in its fiscal fourth quarter. Analysts had expected 42 cents in earnings per share for the fiscal fourth quarter, according to Thomson Reuters.

In the fiscal third quarter HPE announced a commitment to invest $4 billion in "Intelligent Edge" technologies and services over the next four years.

HPE stock is up 16 percent since the beginning of the year.

Also on Tuesday HPE announced the appointment of a new chief financial officer, Tarek Robbiati, who replaces Tim Stonesifer. Robbiati most recently spent two and a half years as chief financial officer of Sprint. CEO Antonio Neri said that Robbiati led Sprint's efforts to reduce its operating expenses.  

Neri said it's too early to tell how tariffs could impact HPE's business.

Less than 5 percent of HPE's cost of sales comes from China, Stonesifer said. "It's a big number, but it's not a huge number," he said. "After rounds one and two [of tariffs], we have been able to make some changes in our supply chain motion and think there is minimal risk from a financial perspective."