(Bloomberg) -- Hewlett Packard Enterprise Co. gave a profit forecast in line with analysts’ average estimate, signaling the server maker’s cost cuts have started to pay off.
Profit excluding some items will be 33 cents a share to 37 cents a share in the current period, the Palo Alto, California-based company said Tuesday in a statement. Analysts projected 35 cents, according to data compiled by Bloomberg. The company also affirmed its annual profit forecast of $1.51 a share to $1.61 a share.
Chief Executive Officer Antonio Neri has cut the company’s workforce, global footprint and supply chain so that the company’s expenses are aligned with its smaller revenue after years of divestments. HPE’s adjusted operating profit margin was 10.1 percent in the period that ended Oct. 31, a 1.9 percentage point improvement for a year earlier. Neri also is trying to diversify into higher-margin businesses, which explains HPE’s decision last week to buy AI and analytics software maker BlueData Software Inc. Sales for the unit that includes servers grew 4.6 percent, in a sign the company is competitive with rivals in a booming market for corporate information technology spending.HPE’s networking unit, Aruba, grew 17 percent in the last period. The hardware maker has sought to nurture the semi-autonomous unit by making it a hub for innovation within the broader company.
HPE shares were little changed in extended trading Tuesday after closing at $15.05. The stock has gained 4.8 percent this year.
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