Categories Earnings, Technology

Hewlett Packard Enterprise expected to post Q2 EPS of $0.36

Information technology giant Hewlett Packard Enterprise (NYSE: HPE) is scheduled to report second-quarter 2019 financial results on Thursday, May 23, after the closing bell. Analysts expect the company to report Q2 earnings of 36 cents per share, on revenues of $7.44 billion, down 0.4% year-over-year.

The Wall Street earnings estimate falls within the management projection for the quarter of 34 to 38 cents per share. It may be noted that the company has surpassed analysts’ estimate in the past four quarters.

Hewlett packard Q1 2019 earnings results

In the last-reported quarter, HPE’s earnings more-than-doubled to $0.34 per share, aided by broad-based demand growth that lifted revenues by 10% to $7.5 billion. Buoyed by the strong results, the management revised up its outlook for the fiscal year.

While Aruba products and services are expected to drive growth in the Intelligent Edge unit, Nimble is likely to push storage revenues. However, the residual impact from the exit of the Tier-1 server business may offset much of the growth in the other units.

Hewlett Packard has also been on a mission to diversify its portfolio. The most recent move in this regard is the acquisition of Cray (NASDAQ: CRAY) for about $1.30 billion, which gives HPE a leeway into the supercomputer business.

The deal values Cray’s stock at $35, representing a premium of about 17%, and is tentatively scheduled to close early next year. It is expected to be accretive to HPE’s adjusted earnings after one full year of completion. Meanwhile, the management has left its free cash flow outlook 
for fiscal 2020 unchanged at $1.9-$2.1 billion, after factoring in the integration costs associated with the transaction.

The acquisition is meaningful in a way that it helps HPE stay relevant in a competitive market that is dominated by the likes of International Business Machines (NYSE: IBM).

HPE shares have gained 13.4% in the year-to-date period. The stock has a 12-month average price target of $16.56, suggesting an 8% upside from the current trading price. Most analysts covering the stock have a Hold rating.

Listen to on-demand earnings calls and hear how management responds to analysts’ questions

Most Popular

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

One thought on “Hewlett Packard Enterprise expected to post Q2 EPS of $0.36

Leave a Reply

Your email address will not be published. Required fields are marked *

Add Comment

Viewing Highlight