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HPE Inc. (HPE.US) Q4 revenue hits record, AI server demand surge drives results above expectations

Market IntelThursday, Dec 5, 2024 7:21 pm ET

1min read

Hewlett Packard Enterprise (HPE.US) beat analyst expectations in its fourth-quarter earnings, driven mainly by a significant increase in server revenue. The company reported Q4 revenue of $8.46 billion, up 15% YoY, topping the average estimate of $8.26 billion. Net income was $1.34 billion, or $0.99 per share, up significantly YoY. Adjusted EPS was $0.58, topping the average analyst estimate of $0.56.

The highlights of Hewlett Packard Enterprise's earnings were the strong growth in server revenue, up 32% YoY to $4.7 billion, topping analyst expectations. Despite a 20% YoY decline in revenue from its Intelligent Edge segment to $1.1 billion, revenue from its cloud segment grew 18% YoY to $1.6 billion. The company expects revenue to grow about 15% in the next quarter, topping the consensus analyst estimate of 14%, and EPS is expected to be between $0.47 and $0.52, the average estimate is $0.48.

In terms of product innovation, Hewlett Packard Enterprise launched new servers equipped with AMD chips in October, designed to support AI clusters for tasks such as training large language models. The AI system revenue grew 16% to $1.5 billion in the quarter, showing the growing demand for high-performance computing, a trend that has also driven the development of hardware manufacturers such as Hewlett Packard Enterprise, Dell Technologies (DELL.US) and Super Micro Computer (SMCI.US).

In terms of M&A, Hewlett Packard Enterprise plans to acquire Juniper Networks, Inc. and focus its business on networking. The $14 billion deal has attracted attention from US competition regulators, but the company said it expects the deal to be completed in early 2025 and has received unconditional approval from almost all jurisdictions, including the EU, UK, Australia, South Korea, etc. Antonio Neri, CEO, emphasized that the company is working closely with the US Department of Justice.

Hewlett Packard Enterprise closed at $21.65 on Thursday, up 28% this year.

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