Hewlett Packard Enterprise delivered first quarter financial results that topped Wall Street expectations, but revenue was down or flat across most of its key business units. However, the company raised its earnings guidance for the fiscal year and noted solid growth in recurring revenue as part of its pivot to as-a-service.
The enterprise software player reported first quarter net income of $223 million, or 17 cents a share, on revenue of $6.8 billion, down 2% from a year ago. Excluding charges, HPE delivered earnings of 52 cents a share.
Analysts were expecting earnings of 41 cents per share on revenue of $6.72 billion. Shares of HPE were up slightly after hours.
Elsewhere on the balance sheet, HPE said compute revenue came to $3 billion, down 1% year over year. Storage revenue was $1.2 billion, down 5% year-over-year. Within that segment, Nimble revenue was up 31% and revenue from All Flash Array Storage products were up 5%.
Meanwhile, High Performance Compute & Mission Critical Systems (HPC & MCS) revenue was $762 million, down 9% from the prior-year period.
The company's intelligent edge revenue came to to $806 million, up 11% from a year ago, and financial services revenue was $860 million, roughly flat from a year ago. HPE said it had Q1 annualized revenue run rate of $649 million, up 27% from the same quarter last year.
"Our revenue exceeded our outlook and we significantly expanded our gross and operating margins to drive strong profitability across most of our businesses," said HPE chief executive Antonio Neri. "Our dedicated, passionate and resilient team members are laser-focused on delivering for our customers and executing our strategy to strengthen our core businesses, double down in areas of growth, and accelerate our pivot to as-a-service to drive long-term sustainable, profitable growth."
As for the outlook, HPE said it expects second quarter earnings between 38 cents and 44 cents, compared to consensus estimates for 38 cents per share. For the fiscal year, HPE now expects earnings in the range of $1.70 and $1.88 a share, up from its previous range of $1.60 to $1.78 per share.