posted better-than-expected financial results for the fiscal first quarter ended Jan. 31 and raised expectations for the full year, a pleasant surprise amid a cascade of cautious comments this week from other technology companies on the outlook for business technology spending.
The company, which owns the old Cray supercomputing company, among others, also said it plans to offer a cloud-based supercomputing service for training large learning models with artificial intelligence.
Antonio Neri, CEO of HP Enterprise, notes that this was the company’s highest January revenue since 2016, and he points out that the company’s non-GAAP operating margin of 11.8% was a record high. HP Enterprise – not to be confused with its cousin HP Inc., which sells personal computers and printers – provides servers, networking, storage and computing hardware for business customers, as well as hybrid cloud services.
“In the first quarter, we continued to outperform our competition despite uneven market demand and generated more revenue in each of our key segments,” CFO Tarek Robbiati said in a statement.
HP Enterprise shares in late trade are up 5.1%, at $16.30.
For the quarter, Hewlett-Packard Enterprise (ticker: HPE) reported revenue of $7.8 billion, up 12% from a year ago, and above the top of the company’s target range of $7.2 billion to $7.6 billion. Street consensus had called for $7.4 billion. On an adjusted basis, the company earned 63 cents per share, exceeding the guidance of 50 to 58 cents. Under generally accepted accounting principles, the company earned 38 cents per share, near the top of the target range of 32 to 40 cents.
The company’s Compute segment had revenue of $3.5 billion, up 14%, while “Intelligent Edge” revenue was $1.1 billion, up 25%. High Performance Computing and Artificial Intelligence, which includes the company’s supercomputing business, had revenues of $1.1 billion, up 34%. Storage revenue was $1.2 billion, up 5%, while financial services revenue grew 4%.
For the full year, HPE had revenue of $28.5 billion, up 3%, with adjusted earnings of $2.02 per share and GAAP earnings of 66 cents.
HP Enterprise sees quarterly revenue of $7.1 billion to $7.5 billion in April, above the Street at $7 billion, with adjusted earnings of 44 to 52 cents per share, in the middle just above consensus of 47 cents . GAAP earnings are expected to be between 27 and 35 cents per share.
The company now sees full-year revenue growth of 6%, up from a previous forecast of 3%, with full-year earnings between $2.02 and $2.10 per share, up from from a previous target range of $1.96 to $2.04 per share.
HPE now sees full year GAAP earnings of between $1.40 and $1.48 per share, up from a previous range of $1.38 to $1.46 per share.
In an interview with from Baron, Neri said the company ended the quarter with an order backlog that was twice its historical level. He also noted that HP Greenlake, the company’s hybrid cloud platform, ended the quarter with $1 billion in annual revenue.
Neri also noted that the company sees opportunities in the burgeoning AI software market. He says HP Enterprise is developing a cloud-based service that allows customers to remotely access supercomputers for training and deploying large language models. Neri says the company is already seeing interest in the service from potential customers.
HP Enterprise also announced the acquisition of Axis Security, a cloud security provider based in Tel Aviv, Israel. Terms have not been disclosed.
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