(Reuters) – Hewlett Packard Enterprise beat estimates for quarterly profit on Tuesday due to easing costs but unfavorable macroeconomic conditions led to a dour forecast for the current quarter.
On an adjusted basis, the “edge-to-cloud” firm earned 52 cents per share, beating analysts’ average estimate of 50 cents, according to LSEG data.
The enterprise technology company’s fourth-quarter expenses fell nearly 17% to $6.84 billion.
Still, sticky inflation and higher-for-longer interest rates have forced companies to cut back on IT spending, hurting firms like HPE.
HPE expects revenue in the first quarter of fiscal 2024 to be in the range of $6.90 billion to $7.30 billion, the mid point of which is below estimates of $7.28 billion.
On an adjusted basis, HPE expects net earnings for the first quarter to be between 42 cents and 50 cents per share, the midpoint of which is slightly below estimates of 47 cents.
Major IT services and software providers like Accenture and India’s Tata Consultancy Services have also flagged cautious spending by enterprises.
In the fourth quarter, Texas-based HPE’s net revenue fell 7% to $7.35 billion, marginally below estimates of $7.36 billion.
Compute, its largest segment, reported revenue of $2.60 billion for the quarter, down nearly 31% from a year earlier.
Annualized revenue run rate, a measure of future revenue, was up 39% at $1.30 billion in the quarter ended Oct. 31.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Maju Samuel)
