HP CEO Says Sales Have Gone Back To Pre-Covid-19 Pandemic Levels

HP

(Yahoo Finance)

Lost in Hewlett Packard Enterprise’s (HPE) announcement this week that it will move its HQ to Houston from the iconic Silicon Valley, is the tech giant’s much better than expected third quarter.

Specifically, sales climbed back to pre-pandemic levels. Not many in Corporate America could say that right now as economic growth decelerates again with the pandemic raging on. HPE CEO Antonio Neri told Yahoo Finance Live he wasn’t too surprised to see the business come back to the extent it did in the quarter.

“We were not surprised because we have been signaling that we had all of the momentum throughout the year, particularly after the second quarter,” Neri said. “We have seen signs of stabilization at the core and we see tremendous growth in the areas where doubled down, like the intelligent edge which was up 5% year-over-year and high performance computing which was up 25% year-over-year.”

Strength in intelligent edge and high-speed computing helped to offset sales declines in HPE’s computer (sales down 5%) and storage (sales down 3%) segments as corporations spent cautiously on on-premise tech gear with employees still working from home.

Coupled with a tight control on expenses, HPE was able to handily beat Wall Street’s third quarter profit forecasts for the quarter. HPE shares gained nearly 9% on the week, according to Yahoo Finance Premium data.

Here are he company’s third quarter results:

Net Sales: $7.2 billion vs. $6.88 billion

Diluted EPS: 37 cents vs. $34 cents

Neri struck a bullish tone of HPE’s top line momentum continuing into 2021.

“At this point in time, I will say demand seems steady which it has been the last three or four months as people are used to operating in this new world,” Neri said.

And the Street is paying attention to the sales recovery.

“We continue to believe the risk-reward for HPE skews positively, especially with a conservative valuation vs. peers and its own history. We remain confident that HPE sees upside bias to EPS estimates from present levels,” wrote Deutsche Bank tech analyst Jerial Ong in a note to clients.

Analysts on average pushed up their profit estimates on HPE for the year following the quarter, per Bloomberg data.

One more quarter like the third quarter out of HPE, the Street may forget about the headquarter move entirely.

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