Hewlett Packard Enterprise (HPE) Tops Q3 EPS by 4c; Boosts FY16 EPS Outlook

Hewlett Packard Enterprise (NYSE: HPE) reported Q3 EPS of $0.49, $0.04 better than the analyst estimate of $0.45. Revenue for the quarter came in at $12.2 billion versus the consensus estimate of $12.64 billion.

Fiscal 2016 third quarter segment results

• Enterprise Group revenue was $6.5 billion, down 8% year over year, flat when adjusted for divestitures and currency, with a 12.6% operating margin. Servers revenue was down 4%, down 2% when adjusted for divestitures and currency, Storage revenue was down 8%, down 5% when adjusted for divestitures and currency, Networking revenue was down 22%, up 12% when adjusted for divestitures and currency, and Technology Services revenue was down 7%, up 1% when adjusted for divestitures and currency.
• Enterprise Services revenue was $4.7 billion, down 5% year over year, down 3% when adjusted for divestitures and currency, with an 8.3% operating margin. Infrastructure Technology Outsourcing revenue was down 6%, down 3% when adjusted for divestitures and currency, and Application and Business Services revenue was down 4%, down 3% when adjusted for divestitures and currency.
• Software revenue was $738 million, down 18% year over year, down 3% when adjusted for divestitures and currency, with a 17.8% operating margin. License revenue was down 28%, down 17% adjusted for divestitures and currency, support revenue was down 17%, flat when adjusted for divestitures and currency, professional services revenue was down 8%, up 1% adjusted for divestitures and currency, and software-as-a-service (SaaS) revenue was down 5%, up 17% adjusted for divestitures and currency.
• Financial Services revenue was $812 million, up 1% year over year, net portfolio assets were up 7%, and financing volume was down 6%. The business delivered an operating margin of 9.9%.

GUIDANCE:

Hewlett Packard Enterprise sees FY2016 EPS of $1.90-$1.95, versus the consensus of $1.87.

For earnings history and earnings-related data on Hewlett Packard Enterprise (HPE) click here.

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