Investing.com - Hewlett Packard Enterprise reported better-than-expected earnings for its fiscal third quarter and raised its full-year guidance as an uptick in gross margins offset the impact of lower revenues.
The company raised its full-year earnings forecast to a range of $1.72 to $1.76 a share from $1.62 to $1.72 previously, topping estimates for earnings of $1.68 a share from S&P Capital IQ. Hewlett Packard Enterprise (NYSE:HPE) was up more than 5% after the report in postmarket trading.
The company reported earnings of 45 cents a share on revenue of $7.22 billion. That compared with consensus estimates from Investing.com for earnings of 40 cents a share on revenue of $7.29 billion.
The earnings beat was driven by an increase in margins to 33.9% for the quarter, up 340 basis points from the prior-year period.
The 7% fall in revenues, meanwhile, comes as Hybrid IT revenue, which accounts for the bulk of growth, slipped 9.2% to $5.5 billion for the quarter from a year earlier.
Its intelligent edge segment reported revenue of $785 million, down 2.9% from a year ago, and financial services revenue fell to $888 million from $928 million a year earlier.
"In Q3, we improved both gross and operating margins, delivered strong non-GAAP earnings, and generated a record level of year-to-date free cash flow," said Antonio Neri, president and CEO of Hewlett Packard Enterprise. "We also invested in important innovation for our customers and announced strategic acquisitions, including Cray, which we now expect to close by the end of fiscal year 2019, earlier than originally planned."