(Bloomberg) -- Hewlett Packard Enterprise Co., a maker of server computers, raised its annual profit forecast, signaling that the company’s cost-cutting measures and spending on new technologies are starting to pay off.
Profit excluding some items will be $1.56 to $1.66 this year, an increase of 5 cents a share on both ends of the guidance, the San Jose, California-based company said Thursday in a statement. Wall Street projected $1.58 a share, according to data compiled by Bloomberg.
HPE Chief Executive Officer Antonio Neri has sought to trim expenses by firing workers and shrinking the company’s global footprint, while investing $4 billion in new technologies, including edge computing. HPE expects to start recouping that investment within the next two years. Revenue declined 1.6 percent to $7.55 billion, driven by a fall in demand for servers. Analysts had expected sales of $7.6 billion. In the last year, the company left a high-volume server segment that generated revenue but little profit.“We will accelerate revenue growth in the second quarter,” Neri said in an interview. Sales of HPE’s software-defined products increased 70 percent in the first quarter, he said, while demand for high-performance computing servers grew 50 percent -- despite a slight decline in total revenue from the server unit.
Shares rose about 3.3 percent in extended trading after closing at $16.23 in New York. The stock has climbed more than 23 percent this year.
For more details on the results, click here.Read the statement here.
(Updates with comments from CEO in Key Insights section.)
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