(Reuters) – Hewlett Packard Enterprise forecasted below the Wall Street estimates for its fourth-quarter revenue. This comes at a time when the demand for the company’s servers is declining due to soft enterprise spending and fierce competition from more AI-focused rivals. As a result, the company’s shares fell by 2.3% after trading hours.
HP Enterprise expects its current-quarter revenue to be between $7.2 billion and $7.5 billion. However, the mid-point of this range is below analysts’ expectations of $7.49 billion, as reported by Refinitiv data.
Rival company Arista Networks, on the other hand, has forecasted a robust quarterly revenue. It achieved better-than-expected results due to the increased demand for its cloud gear following an AI push. HP Enterprise’s peer, Dell Technologies, also expanded its Project Helix offerings by collaborating with Nvidia to provide generative AI for more data secure GenAI.
HP Enterprise has made significant investments to ensure its offerings are suitable for AI workloads. This has enabled the company to retain its existing clients and attract new ones, especially as companies seek to scale up their data centers to support AI-backed services like chatbots and image generators.
The company has raised its outlook for full-year adjusted earnings per share to a range of $2.11 to $2.15. Previously, the company had expected earnings per share in the range of $2.06 to $2.14.
In the third quarter ended July 31, HP Enterprise earned 49 cents per share on an adjusted basis, exceeding expectations of 47 cents. The company also posted a quarterly revenue of $7.0 billion, slightly higher than the estimated $6.99 billion, according to Refinitiv IBES data.
Reporting by Akshita Toshniwal; Editing by Shailesh Kuber
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