HPE Beats Q3 Forecasts, Networking Shines After Juniper Deal

Hewlett Packard Enterprise (NYSE:HPE) delivered stronger-than-expected third quarter results in its first earnings update since buying Juniper Networks, though the stock dipped about 1% after hours Wednesday.

For the quarter ending July 31, adjusted EPS came in at $0.44, a touch above the $0.42 forecast. Revenue jumped 18% year over year to $9.1 billion, topping estimates of $8.83 billion. Networking was the standout, surging 54% to $1.73 billion against expectations of $1.33 billion. Servers also performed well, up 16% to $4.94 billion, while hybrid cloud revenue grew 12% to $1.48 billion.

Guidance was more mixed. HPE sees fourth-quarter EPS at $0.56$0.60, with the midpoint just under consensus. It projected revenue of $9.7 billion$10.1 billion, a bit shy of Wall Street's target. For the full year, though, HPE raised its EPS forecast to $1.88$1.91 from $1.78$1.90. Free cash flow expectations were trimmed to $700 million, down from $1 billion, well below the $1.28 billion analysts had penciled in.

CEO Antonio Neri pointed to strong demand in servers and networking, while CFO Marie Myers said Juniper is already boosting results, with more synergies still to come.