Hewlett Packard Enterprise (NYSE:HPE) reported better-than-expected earnings for its third quarter and issued FY19 earnings guidance above analyst estimates.
The San Jose-based tech company reported Tuesday revenue of $7.2 billion. Gross Margins came in at 33.9%, up 340 basis points from the prior-year period
HPE also reported diluted net earnings of two cents per share, which includes a 42-cent adjustment for a one-time arbitration award to DXC, compared to the previously provided outlook of $0.29 to $0.33 per share
Cash flow from operations was $1.2 billion.
CEO Antonio Neri declared, "In Q3, we improved both gross and operating margins, delivered strong non-GAAP earnings, and generated a record level of year-to-date free cash flow.
"We also invested in important innovation for our customers and announced strategic acquisitions, including Cray, which we now expect to close by the end of fiscal year 2019, earlier than originally planned."
In terms of segment results, Intelligent Edge revenue was $762 million, with 4.9% operating margin. HPE Aruba product revenue was down 4% year over year when adjusted for currency and HPE Aruba Services revenue was up 16% year over year when adjusted for currency.
Hybrid IT revenue was $5.5 billion, with 12.7% operating margin, up 250 bps year over year.
Financial Services revenue was $888 million, with 8.7% operating margin, up 90 bps year over year.
For the fiscal 2019 fourth quarter, Hewlett Packard Enterprise estimates GAAP diluted net EPS to be in the range of $0.24 to $0.28. For fiscal 2019 full-year Hewlett Packard Enterprise now estimates GAAP diluted net EPS to be in the range of $0.65 to $0.69 due to a one-time arbitration award to DXC.
Shares gained 25 cents, or 1.9%, to $13.18
