Shares in Hewlett Packard Enterprise retreated Wednesday amid fiscal third-quarter earnings and revenue that edged by Wall Street targets. Meanwhile, the company's outlook for HPE stock came in mixed.
The maker of computer servers, networking equipment and data storage systems reported earnings after the market close on Tuesday. For the July quarter, HPE earnings were 50 cents a share, up 2% from a year earlier.
Revenue rose 1% to $7 billion, the company said.
Analysts expected HPE earnings of 47 cents a share on sales of $6.99 billion for the period ended July 31. A year earlier, HPE earnings were 48 cents a share on sales of $6.95 billion.
HPE Stock: Outlook Mixed
For the current quarter ending in October, the rival of Dell Technologies predicted earnings of 50 cents a share at the midpoint of its outlook vs. estimates of 49 cents. HPE said it expects revenue of $7.35 billion vs. estimates of $7.46 billion.
"The company saw revenues up 3% driven by robust growth in Edge (up 53% year-over-year) while Compute saw double digit sales decline (-10%) and Storage continued to see challenges (-2%)," Evercore ISI analyst Amit Daryanani said in a note to clients.
He added: "HPE noted they expect fiscal 2024 to see positive revenue growth (Street is at 2%) and importantly mix should enable margin expansion as well."
Shares Were Up 5% For Year
HPE stock slipped 1.6% to 16.56 in early trading on the stock market today.
Shares were up about 5% thus far in 2023 prior to the HPE earnings report. HPE stock has retreated from a 52-week high of 18.14 set on Aug. 8.
Meanwhile, HPE Chief Financial Officer Tarek Robbiati in early August resigned to become the chief executive of RingCentral. Further, HPE in May sold off its stake in a Chinese joint venture for $3.5 billion.
Heading into the HPE earnings report, the tech stock owned a Relative Strength Rating of 82 out of a best-possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
