HPE revenues surge thanks to increased demand for networking devices

HPE revenues surge thanks to increased demand for networking devices

Despite net income falling to US$165 million during the quarter

Hewlett Packard Enterprise (HPE) has reported better-than-expected quarterly revenues, helped by higher sales for its networking equipment.

Shares of the company rose 4.13 per cent to US$14.62 after the bell on 5 September.

Revenue from the company's enterprise group division, which included storage and networking businesses and accounted for more than three-fourths of total revenue, rose nearly three per cent to US$6.79 billion in the third quarter ended July 31.

That number beat the average analyst estimate of US$6.37 billion, according to financial data and analytics firm FactSet.

The company said revenue from sale of servers fell 1 percent while networking revenue rose 16 percent.

The Palo Alto, California-based company said it expected current-quarter profit to be in the range of 26 cents per share and 30 cents per share.

Analysts on an average were expecting profit of 40 cents, according to Thomson Reuters I/B/E/S.

HPE reported a 2.5 per cent rise in quarterly revenue to US$8.21 billion, beating the average analyst estimate of US$7.49 billion.

However, net income fell to US$165 million, or 10 cents per share, in the third quarter, from US$2.27 billion, or US$1.32 per share, a year earlier.

The net income was partly affected by the spinoffs of its enterprise services business with Computer Sciences Corp (CSC) and software business with Micro Focus International PLC, HPE said.

Excluding items, the company earned 30 cents per share.

(Reporting by Arjun Panchadar in Bengaluru; Editing by Arun Koyyur)

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