What To Expect From Hewlett Packard’s (NYSE: HPE) Earnings

Hewlett Packard Enterprise (NYSE: HPE) is on the cusp of revealing its third quarter results for fiscal year 2024 on September 4, and the anticipation is building up among investors and analysts alike. The company, which has become a pivotal player in the AI infrastructure space, is expected to showcase a strong performance driven by significant growth and margin expansion in its general compute servers and AI-infrastructure segment.

HPE's stock price has added 14.41% on a YTD basis, which whilst remaining lower growth than many other AI names, has come on the foundations of relative stability, and with a dividend yield above 2.5% that is significantly healthier than other growth names.

The last quarter came in above consensus estimates, with an EPS of $0.42 against an expected $0.39. Revenue also came in almost $400 million higher than anticipated at $7.2 billion. Whilst EPS has beaten on each of the last three quarters, revenue had previously missed in the two preceding reports, with markets eagerly anticipating the upcoming print.

Over the past 90 days, the earnings per share (EPS) consensus has seen positive revisions seven times, against five downward revisions, indicating a bullish sentiment surrounding the company's financial health. This optimism is further bolstered by the results from its rival, Dell Technologies, whose second quarter performance for fiscal year 2025 marked a substantial operating margin expansion. In fact, Dell’s operating margin surged from 52% in Q2 FY24 to 63% in Q2 FY25, suggesting a favourable market environment that HPE could also be capitalising on.

These projections are mirrored in the positive growth data from the second quarter of calendar year 2024, setting the stage for what could be a very prosperous third quarter earnings report for HPE. The company is anticipated to announce a revenue of $7.9 billion and EPS of $0.52/share for the quarter in question.

Looking ahead, the outlook for HPE's financials is quite encouraging, with revenue growth expected to reach $32.7 billion for the fiscal year 2025, accompanied by a healthy diluted EPS of $2.03/share.

As the market gears up for the forthcoming earnings, the next step for HPE's stock remains subject to potentially significant shifts. Operational successes will no doubt we well received, as many see the company as being well poised to ride the wave of server market expansion and AI innovation.