Source: Financial Times
Hewlett Packard Enterprise posted upbeat quarterly results and issued a rosier outlook that topped analyst forecasts, sending shares higher.
HPE — the enterprise technology business that split off from HP Inc’s PCs and printers unit — says its fiscal third quarter net revenue climbed 4% from a year ago to $7.76-billion — or a 1% rise when adjusted for currency effects.
That topped analyst forecasts for $7.68-billion, according to a Thomson Reuters survey.
Revenues in hybrid IT — its largest division, which includes computer systems with storage and networking functions — rose 3% from a year ago to $6.2-billion.
In its so-called Intelligent Edge division, which is developing decentralised “Internet of things” technology that allows data to be processed at the point of collection, revenues were up 10% from a year ago to $785m, while financial services revenues rose 3% to $928-million.
Net income rose to $451-million or 29 cents a share in the three months ended in July, up from $165-million or 10 cents a share in the year ago quarter.
Adjusting for one-time items, earnings of 44 cents a share, handily topped forecasts of 37 cents.
“HPE has delivered a strong Q3 and our results prove we have the right strategy to deliver in the areas of highest value for our customers,” says Antonio Neri, chief executive officer.
“Solid execution across each of our business segments, combined with market momentum, will enable us to deliver FY18 revenue and earnings well beyond our original outlook,” he adds.
The company also lifted its full-year earnings outlook again, to a range of $1.85 to $1.90, up from $1.70 to $1.80 previously.
On an adjusted basis, the company now expects to report earnings of between $1.50 to $1.55 a share, up from $1.40 to $1.50 previously. That also exceeded Wall Street’s projections of $1.46.
For the current quarter, HPE forecast adjusted earnings of between 39 to 44 cents a share.
The Palo Alto-based company also says it appointed Tarek Robbiati as its new finance chief effective September 17. Mr Robbiati, who most recently served as finance chief at Sprint, will succeed Tim Stonesifer, who will remain with the company through the end of October.
HPE shares, which are up nearly 17% year-to-date, climbed 1.4% in extended trade to $16.98.
By Asha Speckman for TimesLive
The economy was unlikely to shake off anaemic growth in the second quarter of this year‚ economists said on Tuesday after a dip in the South African Chamber of Commerce and Industry (Sacci) Business Confidence Index confirmed their concerns.
The Sacci Business Confidence dipped to 93.7 index points in June from 94 index points previously. The index has slipped each month from a high of 99.7 in January this year.
John Ashbourne‚ Africa economist at Capital Economics said: “The latest drop strengthens our view that South Africa’s economy remained weak in quarter two.”
Economic growth contracted by 2.2% in the first quarter of this year after a stronger finish in 2017.
The Sacci index is a measure of business activity and is based on several indicators including energy production‚ trade figures and the performance of financial markets.
Seven of the thirteen sub-indices reflected negativity in the business environment.
The largest negative influences were the weaker rand exchange rate‚ lower real retail sales‚ a decline in the value of building plans passed and higher energy costs.
A rise in merchandise import and export volumes and new vehicle sales impacted positively.
The risk of a global trade war and potential knock-on effects also weighed negatively on the outlook from certain industries in South Africa‚ the survey noted.
Ashbourne anticipated further clarity when mining and manufacturing production and sales data for May are published on Thursday.
Weakness in these sectors is‚ however‚ expected to continue. The recent Absa purchasing manufacturer’s index‚ which measures activity in the manufacturing sector‚ dropped to 47.9 index points in June from 49.8 in May.
The index reading was 50.9 in April. A reading below the 50 neutral mark indicates a possible slowdown in business activity.
Lara Hodes‚ an economist at Investec‚ said about second quarter growth: “We’re not expecting positive news.”
Hodes said growth in mining was tempered by continued uncertainty over the mining charter and a restrained investment.
Investec expects an improvement to -3.5% for mining in May compared to -4.3% previously. It has forecast manufacturing to be -1.4% from 1.1% in April compared to a BNP Paribas expectation of 0.1% growth from 1.1% previously. However‚ Hodes said retail trade sales and consumer confidence data to be released next week would complete the picture.
Ashbourne said the potential slowdown had prompted London-based Capital Economics to temper its growth forecast for the year to 1.3% from 2% previously.
National Treasury has forecast 1.5% for the year and the Reserve Bank expects 1.7%.
Sacci said: “It has become imperative that structural economic matters hampering inclusive economic growth should be addressed with economic rationality. Uncertainties surrounding economic policy direction and position should be clarified so that investor and business confidence can reaffirm itself.”