The stock of Hewlett Packard Enterprise (HPE) is up 15% after the information technology company posted better-than-expected financial results.
HP Enterprise, as the company is known, reported earnings per share (EPS) of $0.42 U.S., which beat the consensus expectation among analysts of $0.39 U.S.
Revenue for what was the company’s fiscal second quarter came in at $7.20 billion U.S., which topped the $6.80 billion U.S. forecast on Wall Street. Sales rose 3% from a year earlier.
Management attributed the strong results to rising demand for its artificial intelligence (A.I.) servers.
Specifically, company executives said they are benefiting from a loosening in the supply of Nvidia (NVDA) H100 microchips that are used in its servers.
The server segment posted quarterly revenue of $3.90 billion U.S., up 18% from a year earlier, and above analyst expectations for $3.46 billion U.S. in sales.
A.I. systems revenue at HP Enterprise more than doubled sequentially to $900 million U.S.
The company said that it has cumulative A.I. systems orders of $4.60 billion U.S. and that the company’s backlog of A.I. server orders is about flat.
However, the pipeline of new orders is reportedly multiples higher than the previous backlog.
The company’s networking hardware segment had revenue of $1.10 billion U.S., down 19% year over year, but in line with Wall Street estimates.
Free cash flow in the quarter totaled $610 million U.S., up from $322 million U.S. a year ago.
In terms of guidance, HP Enterprise is forecasting revenue for the current quarter of $7.40 billion U.S. to $7.80 billion U.S., and profits of $0.43 U.S. to $0.48 U.S. per share.
Wall Street had $7.40 billion U.S. in revenues and profits of $0.47 U.S. a share penciled in for the company.
Before today (June 5), HP Enterprise’s stock had risen 17% in the last 12 months and was trading at $17.60 U.S. per share.
