Hewlett Packard Enterprise Co (NYSE:HPE, ETR:2HP) shares surged almost 12% as it reported strong results for the fiscal second quarter driven by AI server demand and raised its full year guidance.
The technology company now expects revenue to grow by 1% to 3% for the full year, compared to its earlier forecast of flat to 2% revenue growth.
Adjusted earnings per share (EPS) are seen in the range of $1.82 to $1.92 or $1.87 at the midpoint up from its earlier guidance of $1.85 to $1.95 or $1.90 at the midpoint.
Both measures exceeded Wall Street analysts’ expectations of a revenue decline of 0.2% to about $29 billion and EPS of $1.88.
Meanwhile, revenue for the quarter ended April 30, 2024, increased 3% from the year-ago quarter to $7.2 billion, ahead of the $6.8 billion expected.
Server revenue was up 18% year-over-year to $3.9 billion but Intelligent Edge revenue was down 19% at $1.1 billion.
AI systems revenue doubled from the prior quarter, attributed to HPE’s strong order book and better conversion from its supply chain.
“Our deep expertise in designing, manufacturing, and running AI systems at scale, fueled growth of cumulative AI systems orders to $4.6 billion dollars, with enterprise AI orders representing more than 15%,” HPE CEO Antonio Neri commented.
Adjusted EPS was $0.42, ahead of the $0.39 expected by analysts.
HPE shares stood at US$19.65 in the early afternoon on Wednesday.