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Hewlett Packard Enterprise Beats Earnings Estimates Again

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Dec. 6 2018, Published 8:08 a.m. ET

Hewlett Packard Enterprise beats estimates

Hewlett Packard Enterprise’s (HPE) earnings have improved sequentially for the past six quarters, and have beaten analysts’ estimates in the past five quarters.

  • Its non-GAAP EPS of $0.45 in the fourth quarter of fiscal 2018 beat analysts’ consensus estimate of $0.43.
  • Its EPS of $0.44 in the third quarter beat analysts’ estimate of $0.37.
  • Its EPS of $0.34 in the second quarter beat analysts’ estimate of $0.31.
  • Its EPS of $0.34 in the first quarter beat analysts’ estimate of $0.22.
  • Its EPS of $0.31 in the fourth quarter of fiscal 2017 beat analysts’ estimate of $0.28.
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Why HPE’s earnings have improved

In the fourth quarter of fiscal 2018, HPE’s adjusted EPS of $0.45 beat its guidance of $0.39–$0.44 and marked a 55.2% rise YoY (year-over-year) from $0.29. The enterprise software player reported GAAP EPS of -$0.52, missing its guidance of $0.16–$0.21 primarily due to US (SPY) tax reform.

HPE’s strong earnings were driven by growing demand for its storage and data center networking products, and its operating margin improved due to its cost-saving measures boosting profitability.

Hewlett Packard Enterprise and HP (HPQ) were split from Hewlett-Packard in 2015. HP posted EPS of $0.54 in the fourth quarter of fiscal 2018, in line with expectations, and peer Cisco Systems (CSCO) posted EPS of $0.75 in the first quarter of fiscal 2019 (ended October 27), beating analysts’ estimate of $0.72 by 4.2%. Juniper Networks’ (JNPR) Q3 2018 EPS of $0.54 beat analysts’ estimate of $0.44.

Earnings expectations

HPE expects EPS of $0.33–$0.37 in the first quarter of fiscal 2019, higher than its prior-year EPS but lower sequentially. The company reported adjusted EPS of $0.34 in the first quarter of fiscal 2018 and $0.45 in the fourth quarter of fiscal 2018. The company expects EPS of $1.51–$1.61 in fiscal 2019, compared with $1.56 in fiscal 2018 and $1.41 in fiscal 2017.

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