HPE beats Q1 earnings estimates with growth in "intelligent edge"
HPE published its first quarter fiscal 2019 financial results on Thursday, beating earnings expectations and slightly missing revenue expectations. The company raised its EPS outlook for the fiscal year.
Non-GAAP earnings for the quarter came to 42 cents a share, up 31 percent from the prior-year period. Revenue came to $7.55 billion, down 2 percent from the prior-year period.
Analysts were expecting earnings of 35 cents on revenue of $7.6 billion.
"Today we reported another strong quarter for Hewlett Packard Enterprise as we continue to execute against our strategy of growing in the Intelligent Edge and delivering profitable growth in Hybrid IT," CEO Antonio Neri said in a statement. "Looking forward, we are confident that HPE's differentiated, software-defined solutions will continue to gain traction with customers looking to harness the explosion of data, driving accelerated revenue growth starting in Q2."
HPE's strategically important Intelligent Edge segment brought in revenue of $686 million, up 5 percent year-over-year. Within that segment, HPE Aruba Product revenue was up 3 percent with balanced growth across wired and WLAN. HPE Aruba Services revenue was up 20 percent.
The Hybrid IT segment delivered revenue of $6 billion, down 3 percent year-over-year. Within that segment, Compute revenue was down 3 percent. HPE noted that its high-margin Value Compute portfolio grew approximately 20 percent, driven by strength in high-performance compute, hyper-converged and composable.
Also within Hybrid IT, Storage revenue was up 3 percent, with particular strength in All-Flash Arrays, which grew 20 percent. The segment saw HPE Pointnext revenue decline 6 percent, primarily due to the company's intentional exit of certain geographies.
Financial Services revenue was $919 million, up 3 percent year-over-year.
For the second quarter, HPE expects a non-GAAP diluted net EPS in the range of 34 cents to 38 cents. For FY 2019, it expects non-GAAP diluted net earnings per share in the range of $1.56 to $1.66.