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September 06, 2017

HPE server sales and its CEO stay on course

HPQ3-ProfitsFive years ago this fall, Meg Whitman became CEO of HP. In 2011 Hewlett-Packard was a single monolithic company which just swallowed a $11 billion taste of Autonomy Software. One day after the company cut Autonomy loose, Whitman's HP Enterprise announced it beat analyst estimates on sales and profits.

It's not a bad trick for a corporation that's been shedding products and sectors ever since Whitman took over. The fortunes of HP might be of no more than casual interest for homesteading 3000 customers, including those who use the Stromasys Charon virtualizer for their MPE/iX platform. Hewlett-Packard Enterprise continues to sell servers that can host alternatives to the PA-RISC iron. Yesterday's results showed the vendor's server sales dipped only slightly in the period ending July 31.

Sales for the full company were $8.2 billion, ahead of the $7.5 billion predicted by analysts. Earnings were also out in front of estimates, 31 cents per share versus a prediction of 26 cents. The markets moved HP's stock upward on the news. One analyst said he's still concerned for HPE's future.

In a report from the San Jose Mercury News, Rob Enderle said "regardless of the firm’s structural changes, this is a firm that still appears to be in trouble and there is, as yet, no bright light at the end of the tunnel." Sales rose in the latest quarter on the strength of a strong period for storage and networking equipment. Moving Autonomy to Micro Focus earned HP $8.8 billion, according to Whitman, who had to address rumors she is in the running for the new CEO job at Uber.

Taking over a company with a top management strategy in tatters seems to be a one-time thing for Whitman. On the analyst conference call that delivers the business results, she said Uber's search spotlight fell upon her late.

“I was called in late in the Uber search,” she said. Uber reminded her of her former company, eBay, in that both companies made their name by upending traditional industries.

“I’ve dedicated the last six years of my life to this company,” Whitman said. “I actually am not going anywhere.” She spent a year on the HP board of directors before taking over for CEO Leo Apotheker, who was the third straight HP CEO to leave office in a cloud of disappointment. Whitman's six years for HP matches Carly Fiorina's tenure and is one year longer than Mark Hurd served.

Divesting HP Enterprise of most businesses except for infrastructure might be moving away from some profits. Upon cutting Autonomy and business software loose, HPE cut its earnings estimate for FY 2017 10 to 16 cents per share. HP wants to build private clouds on next-generation infrastructure that integrates with public cloud resources.

Intelligent Edge, which encompass technologies related to the Internet of Things, is also on the list of HP missions. Services and helping customers successfully execute projects in those areas, using hardware and integration support, is the third pillar of the slimmed-down HPE.

The company made profits reappear in the latest quarter after a Q2 of red ink, using Generally Accepted Accounting Practice numbers. Traditional IT, where HP's made its largest footprint, is growing at a 2 percent rate across the industry. The newer cloud infrastructure business, is forecast to grow at 15 percent a year through 2020.

08:30 PM in News Outta HP | Permalink

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