Hewlett Packard Enterprise Co. demonstrated the resiliency of its business as it posted fiscal third-quarter financial results that were in line with Wall Street’s expectations, pushing its stock slightly higher in after-hours trading.

The company reported earnings before certain costs such as stock compensation of 48 cents per share on revenue of $6.95 billion, up just 1% from a year ago. It was hardly the most stellar growth, but it did result in a net profit of $409 million.

Most importantly, the results matched expectations. Wall Street analysts were expecting earnings of exactly 48 cents per share too, with the consensus estimate for revenue coming in at $6.97 billion. HPE’s stock, which had barely moved earlier in the day, ticked up almost 2% on the back of the report.

HPE President and Chief Executive Antonio Neri (pictured) said the company’s revenue and profit growth was “particularly notable” given the dynamic market it is operating in.

“Our growth in recurring revenue this fiscal year is evidence of customer’s strong response to our HPE GreenLake platform,” Neri said. “Customers continue to prioritize investments in IT and are finding HPE’s industry-leading edge-to-cloud portfolio to be particularly relevant in today’s complex macroeconomic environment, where technology innovation is critical to accelerate business transformation and deliver important business outcomes.”

HPE is a provider of information technology hardware such as servers, storage and networking gear, plus associated software services. Its flagship offering these days is HPE GreenLake, a portfolio of hardware and software products that enterprises can buy on a pay-as-you-go basis, rather than purchase everything upfront.

Revenue from HPE GreenLake is included in the company’s Intelligent Edge business segment and it was one of its best performing. It pulled in revenue of $941 million in the quarter, up 8% from a year earlier and above the analyst’s consensus estimate of $912 million. Within that segment, Aruba Services revenue was up in double digits from the prior-year period and Intelligent Edge as-a-Service annualized recurring revenue jumped more than 60% from the prior-year period.

Another strong performing business unit was HPE’s High Performance Computing and AI segment, which delivered $830 million in sales, up 12% and well above the forecast of $788 million. Elsewhere, the picture was less rosy for HPE, with its Compute segment driving $3 billion in sales, down 3%. Storage revenue fell 2%, to $1.2 billion, while Financial Services declined 3%, to $817 million in sales.

Analyst Charles King of Pund-IT Inc. said he was encouraged by HPE’s overall results, noting that it did fairly well given the headwinds it faces around supply chain constraints, component shortages and currency fluctuations.

“White its traditional compute and storage businesses fell short, HPE’s Intelligent Edge delivered its seventh consecutive quarter of double-digit, year-over-year order growth,” King pointed out. “That is a vital point given the growing importance of edge computing among enterprises. The company also enjoyed 39% growth in total as-a-Service orders year-over-year, another future-focused business opportunity. Overall, HPE’s leadership appears to be doing a good job managing global uncertainties and market expectations.”

“The HPE transformation is ongoing and the vendor is operating well in  difficult macroneconomic and supply chain conditions,” added Holger Mueller of Constellation Research Inc. “This allows HPE to show small growth even when computer and storage did not. Now all eyes are on Neri and team to see if they can deliver to ARR growth guidance for the rest of the FY.”

Looking to the next quarter, HPE said it sees earnings in a range of 52 to 60 cents per share, the midpoint of which is just below Wall Street’s consensus of 58 cents per share. For the full fiscal 2023 year, HPE sees earnings of between $1.96 and $2.04 per share, down slightly from a previous range of $1.96 to $2.10 per share. That’s more or less in line with the consensus of $2.03 per share in full year earnings.

In an interview with Barron’s, Neri explained that the tighter range of forecasts reflects the company’s exit from Russia and Belarus, in addition to foreign exchange headwinds, as opposed to any change in demand.

It was a busy quarter for HPE as it held its annual user conference, HPE Discover, where it unveiled a long-term cloud strategy to take the company forward, much of it focused on HPE GreenLake. The conference was a success, with analysts giving HPE’s future plans the thumbs up.

Neri himself stopped by theCUBE, SiliconANGLE Media’s mobile livestreaming studio that was covering the show. You can watch the full interview below, where Neri discusses the impact of GreenLake and the as-a-service business, as well as the ongoing silicon chip shortage:

Photo: SiliconANGLE