HPE struggles to grow revenue in fourth quarter despite customer wins

Hewlett Packard Enterprise Company (HPE) reported revenue of $7.2 billion, up 6 percent from the prior quarter and flat from the prior-year period, during the fourth quarter of 2020.
HPE revenue in recent quarters
HPE reported HPC & MCS revenue of $975 million, up 50 percent from the prior quarter and 25 percent from the prior-year period.

HPE registered Intelligent Edge revenue of $786 million, up 15 percent from the prior quarter and 6 percent from the prior-year period.

Segment Results

Intelligent Edge revenue was $786 million, up 6 percent year over year, with 10.1 percent operating profit margin, compared to 6.2 percent from the prior-year period. Revenue grew 15 percent sequentially. Intelligent Edge was recognized as a leader for the 15th year in the Gartner Magic Quadrant for wired and WLAN access infrastructure. The company also expects to take share in both campus switching and WLAN.

High Performance Compute & Mission Critical Systems (HPC & MCS) revenue was $975 million, up 25 percent, with 12.2 percent operating profit margin, compared to 10.2 percent from the prior-year period. Revenue grew 50 percent sequentially driven by strong performance in Cray, HPC-Apollo and MCS.

Compute revenue was $3.2 billion, down 5 percent year over year, with 6.1 percent operating profit margin, compared to 13.9 percent from the prior-year period. Revenue was down 6 percent sequentially or 7 percent when adjusted for currency but was up low single-digits when adjusted for backlog conversion.

Storage revenue was $1.2 billion, down 3 percent, with 16.7 percent operating profit margin, compared to 17.4 percent from the prior-year period. Revenue grew 8 percent sequentially driven by operational execution, reduction of backlog and momentum in key areas of the portfolio.

Advisory & Professional Services (A&PS) revenue was $245 million, down 9 percent, with (0.4 percent) operating profit margin, compared to 0.4 percent from the prior-year period. Revenue was up 8 percent sequentially as COVID-19 impacted consulting activities and chargeability levels of our team members. A&PS is a strategic business that pulls through significant infrastructure and operational services sales.

Financial Services revenue was $849 million, down 3 percent year over year. Revenue grew 5 percent sequentially, with 7.7 percent operating profit margin, compared to 8.4 percent from the prior-year period.

Antonio Neri, president and CEO of Hewlett Packard Enterprise, said: “Customers have increasingly turned to HPE for our unique capabilities from edge to cloud that help them empower their workforces, deploy resilient new IT solutions and extract insights from critical data, while consuming these solutions more flexibly as a service.”

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