Hewlett Packard Enterprise on Wednesday reported fiscal third-quarter earnings that topped Wall Street targets. Guidance for HPE stock fell short amid an update on the partial sale of a Chinese joint venture.
The maker of computer servers, networking equipment and data storage systems reported earnings after the market close. For the July quarter, HPE earnings rose 2% on an adjusted basis to 50 cents a share.
Revenue rose 10% to $7.7 billion, the company said.
HPE Stock: Update On Chinese Joint Venture
Analysts expected HPE earnings of 47 cents a share on sales of $7.67 billion for the period ended July 31. A year earlier, HPE earnings were 49 cents a share on sales of $7 billion.
For the current quarter ending in October, the company forecast adjusted EPS of 24 cents, well below estimates of 55 cents. HPE said it expects revenue in a range of $8.1 billion to $8.4 billion, above estimates of $8.2 billion.
In the earnings release, the company said: "HPE also notes that on Sept.4, 2024, the company received proceeds of approximately $2.1 billion from the partial sale of its equity position in H3C Technologies, representing 30% of all H3C shares from Chinese IT company Unisplendour International Technology. The financial impact of this transaction will be reflected in HPE's Q4 and full year fiscal 2024 earnings announcement later this year."
On the stock market today, HPE stock fell 3.3% to 18.15 in early trading. Shares were up 10% in 2024 prior to the HPE earnings report, despite a sharp pull back in July.
Heading into the HPE earnings report, the tech stock had a Relative Strength Rating of 66 out of a best-possible 99, according to IBD Stock Checkup.
In early 2024, HPE agreed to buy Sunnyvale, Calif.-based Juniper Networks for $14 billion in cash.
HPE expects the deal to be earnings and free-cash-flow accretive in the first year post-close. The deal is expected to close in late 2024 or early 2025.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
