Hewlett Packard Enterprise Co (NYSE:HPE) saw its shares climb more than 2% in premarket trading Thursday after posting a strong fiscal third-quarter performance that surpassed expectations. However, the company’s guidance for the fourth quarter fell slightly below Wall Street estimates at the midpoint.
HPE reported adjusted earnings per share of $0.44, beating forecasts by $0.02, while revenue jumped 19% year-on-year to $9.14 billion, well above the $8.35 billion consensus. GAAP EPS came in at $0.21, reflecting acquisition and restructuring-related costs.
Free cash flow reached $790 million, up $121 million from the prior year’s quarter, while operating cash flow totaled $1.3 billion. The company’s annualized revenue run-rate hit $3.1 billion, a 77% increase from a year ago, underscoring strength in HPE’s subscription-based offerings.
“HPE delivered record-breaking revenue and improved profitability this quarter as we marked a major milestone by closing our acquisition of Juniper Networks,” said Antonio Neri, president and CEO. “Customer demand stretched broadly across our portfolio and was particularly strong in our Server and Networking segments.”
Server revenue increased 16% to $4.9 billion, while networking revenue, including Juniper contributions, surged 54% to $1.7 billion. Hybrid Cloud revenue grew 12% to $1.5 billion, and Financial Services totaled $886 million, showing flat performance in constant currency.
Following the results, Bank of America analysts maintained their Buy rating on HPE shares, noting they “see upside from Juniper synergies, structurally higher margins and upside from AI.” Morgan Stanley analysts added that the results “were modestly ahead of our expectations with relative strength in Servers and Networking.”
“Keeping our eyes on AI server margins, but believe tonight’s results set up positively for HPE’s A-Day next month, a key stock catalyst,” they said.
For Q4, HPE expects adjusted EPS of $0.56–$0.60, slightly below the $0.59 consensus at the midpoint, with revenue projected between $9.7 billion and $10.1 billion, marginally below the $10.1 billion estimate.
“In Q3, we delivered on our commitments, generating record revenue, as well as improved sequential operating profit with major contributions from our three largest segments,” said Marie Myers, executive vice president and CFO. She highlighted that the Juniper acquisition already boosted results, with further gains expected from integration and cost synergies.
Although operational results remain strong, the softer midpoint guidance signaled a cautious outlook toward year-end, reflecting potential challenges in execution or integration that tempered investor enthusiasm.
Hewlett Packard Enterprise stock price
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