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HP Enterprise Shares Soar on Strong Sales of Networking Gear

September 5, 2017

Data center technology company Hewlett Packard Enterprise reported a better-than-expected quarterly revenue, helped by higher sales for its networking equipment.

Shares of the company rose 4.13% to $14.62 after the bell on Tuesday.

Revenue from the company’s enterprise group division, which included storage and networking businesses and accounted for more than three-fourths of total revenue, rose nearly 3% to $6.79 billion in the third quarter ended July 31.

That number beat the average analyst estimate of $6.37 billion, according to financial data and analytics firm FactSet.

The company said revenue from sale of servers fell 1% while networking revenue rose 16%.

The Palo Alto, Calif.-based company said it expected current-quarter profit to be in the range of 26 cents per share and 30 cents per share.

Analysts on an average were expecting profit of 40 cents, according to Thomson Reuters I/B/E/S.

HPE reported a 2.5% rise in quarterly revenue to $8.21 billion, beating the average analyst estimate of $7.49 billion.

However, net income fell to $165 million, or 10 cents per share, in the third quarter, from $2.27 billion, or $1.32 per share, a year earlier.

The net income was partly affected by the spinoffs of its enterprise services business with Computer Sciences and software business with Micro Focus International, HPE said.

Excluding items, the company earned 30 cents per share.