HPE Shares Rise 3% On Q3 Beat Despite Soft Q4 Guidance

Hewlett Packard Enterprise Co. (NYSE:HPE) shares rose more than 3% on Thursday after the company posted strong fiscal third-quarter results, though its fourth-quarter outlook fell short of market expectations.

Adjusted EPS was $0.44, beating estimates by $0.02. Revenue surged 19% year-over-year to $9.14 billion, well above consensus of $8.35 billion. GAAP EPS was $0.21, reflecting charges related to acquisitions and restructuring.

Free cash flow rose to $790 million, up $121 million from last year, while operating cash flow reached $1.3 billion. Annualized revenue run-rate climbed 77% to $3.1 billion, driven by subscription-based offerings.

By segment, servers generated $4.9 billion, up 16%, while networking revenue, boosted by Juniper, jumped 54% to $1.7 billion. Hybrid Cloud grew 12% to $1.5 billion, and Financial Services was flat at $886 million.

For Q4, HPE guided EPS of $0.56–$0.60, with the midpoint just below consensus of $0.59, and revenue of $9.7–$10.1 billion, slightly under the $10.1 billion estimate.