Hewlett Packard Enterprise has surpassed analysts' estimates for quarterly profit and revenue, driven by higher demand for its storage and data centre networking products.
The tech giant’s annual sales have slid since it split from Hewlett-Packard in 2015 as its mainstay server business has struggled with corporate customers increasingly buying non-branded servers that are much cheaper.
In response, HPE is cutting costs as part of its HPE Next initiative announced last year, aiming to drive gross cost savings of US$1.5 billion in the next three years.
The vendor, which competes with rivals such as Dell EMC and Cisco, forecast current-quarter adjusted earnings between 33 cents and 37 cents per share, the mid-point of which came in line with Wall Street estimates.
Revenue from its Hybrid IT division, which houses servers, storage and data centre networking products, rose 4.6 per cent to US$6.44 billion, above analysts' estimates of US$6.30 billion, according to data from Refinitiv.
“Hewlett Packard Enterprise delivered another impressive quarter in Q4, concluding a very successful fiscal year 2018 marked by significant transformation and achievement,” said Antonio Neri, president and CEO of HPE.
“We excelled in delivering differentiated new capabilities for our customers that drove meaningful top line growth while expanding margins that fuelled strong cash flow and shareholder returns.”
Meanwhile, the company's net loss was US$757 million, or 52 cents per share, in the fourth quarter ended 31 October from a profit of US$524 million, or 32 cents per share, a year earlier.
“In 2019, I have great confidence that our experienced global team and proven strategy will accelerate what comes next for our customers from edge to cloud,” Neri added.
HPE's revenue rose 3.7 per cent to US$7.95 billion, above analysts' average estimate of US$7.84 billion.
Excluding items, the company earned 45 cents per share, beating the average analyst estimate of 43 cents.
(Reporting by Sayanti Chakraborty in Bengaluru; Editing by Shailesh Kuber)