Hewlett Packard Enterprise to relocate to Houston; Q4 results top expectations
Shares of technology giant Hewlett Packard Enterprise dipped slightly in late trading after the company this afternoon reported revenue and profit for its fiscal fourth quarter that topped Wall Street's expectations, and said it will relocate its headquarters from San Jose, California, to Houston, Texas.
HPE's forecast for this quarter's profit per share, and for the full year, also beat Wall Street's expectations.
Hewlett said it made the decision to relocate given that Houston is its largest U.S. area of employment. It will keep its Bay Area offices for "innovation," the company said:
HPE has made the decision to relocate its headquarters from San Jose, California, to Houston, Texas. HPE's largest U.S. employment hub, Houston is an attractive market to recruit and retain future diverse talent, and is where the company is currently constructing a state-of-the-art new campus. The Bay Area will continue to be a strategic hub for HPE innovation, and the company will consolidate a number of sites in the Bay Area to its San Jose campus. No layoffs are associated with this move.
CEO Antonio Neri described the quarter as having "strong performance," adding that "In Q4 we saw a notable rebound in our overall revenue, with particular acceleration in key growth areas of our business."
Neri described the pandemic as driving more business Hewlett's way:
The global pandemic has forced businesses to rethink everything from remote work and collaboration to business continuity and data insight. Over the last several months, customers have increasingly turned to HPE for our unique capabilities from edge to cloud that help them empower their workforces, deploy resilient new IT solutions and extract insights from critical data, while consuming these solutions more flexibly as a service.
For the three months ended in October, Hewlett reported revenue of $7.2 billion, up 5% from the prior quarter and flat with the prior-year period, with earnings per share of 37 cents.
Analysts had been modeling $6.88 billion in revenue and 34 cents per share in profit.
By category of revenue, the biggest gain was in the company's High Performance Compute & Mission Critical Systems products, which rose by 25%, year over year, to $975 million.
The company's Intelligent Edge products, including wired and wireless networking equipment, rose 6% to $786 million.
Compute revenue of $3.2 billion was down 5%, while storage products revenue declined 3% to $1.2 billion. Hewlett's Professional Services revenue declined 9% and its financial services revenue declined by 3%.
For the current quarter, the fiscal first quarter, company sees profit per share, on a non-GAAP basis, of 40 cents to 44 cents. That is above consensus for 35 cents per share.
For the full year, the company raised its outlook to a range of $1.60 to $1.70. That is above consensus for $1.53 per share.
The company continues to expect free cash flow of $900 million to $1.1 billion this year.