Hewlett Packard Enterprise reported weak fourth-quarter revenue and server numbers, but beat earnings expectations and reaffirmed its fiscal year guidance on strong artificial intelligence demand.
"I'm incredibly pleased with the results we posted in Q4 ... despite the fact that we were on the lower end of the guide on revenues, because that was driven by the conversion of some unique deals in AI, a couple driven by the U.S. shutdown, and one in Europe, which was driven by the readiness in the data center," CEO Antonio Neri told CNBC's "Money Movers" on Friday.
The company reported earnings after the bell on Thursday, posting revenue of $9.68 billion, which was up 14% over the year prior but fell short of the $9.94 billion in revenue expected by analysts polled by LSEG.
The revenue miss and weakness in the company's server segment initially sent the stock down as much as 9%. Shares rebounded on Friday.
HPE beat earnings expectations for Q4, with adjusted earnings of 62 cents per share coming in above the 58 cents per share expected by LSEG.
CFO Marie Myers said on the earnings call with analysts that the adjustments came from the "amortization of intangible assets, Juniper-related acquisition costs, stock-based compensation expense and cost reduction plan expense, partially offset by adjustments for taxes and other adjustments."
The company reaffirmed the fiscal year 2026 revenue outlook range of 17% to 22%, but issued weak guidance for the first quarter.
The company said it expects fiscal 2026 first-quarter revenue in the range of $9 billion to $9.4 billion, which was short of the $9.87 billion expected by FactSet analysts.
Rising costs, seasonality and the timing of AI server deals were all factors in the guidance.