(Bloomberg) — Hewlett Packard Enterprise Co. gave a weaker-than-predicted forecast for the current quarter as it struggles to get enough chips to meet what it says are surging orders.
Profit, excluding some items, will be 44 cents to 52 cents a share in the three months ending in October, the Houston-based company said Thursday in a statement. That compares with analysts’ average projection of 49 cents, according to data compiled by Bloomberg.
Chief Executive Officer Antonio Neri is trying to convert HPE’s customers into subscribers for additional services that work with servers and networking gear, following the trend among hardware makers. For now, the company is dependent on purchases of that gear for much of its revenue.
Like its peers, HPE is vulnerable to industrywide shortages of components, particularly semiconductors, which have stymied computer companies from fulfilling all of their demand.
“There is no question that supply continues to be a challenge and will continue to be for the next couple of quarters,” Neri said in an interview, adding that HPE has raised prices in response to the shortage.
Still, Neri said the shift to remote work during the pandemic has “created an opportunity” for HPE and that the company saw increased demand across the entire portfolio.
Orders were up double-digits in the fiscal third quarter from a year earlier and 11% year to date from the same period a year earlier, HPE said in the statement.
Revenue rose 1.2% to $6.9 billion in the quarter, which ended July 31. Profit, excluding some items, was 47 cents a share. Analysts, on average, estimated adjusted earnings of 42 cents a share on revenue of $6.93 billion.
Net income was $392 million, or 29 cents a share, compared with 9 million, or 1 cent, in the period a year earlier.
The company said it intends to renew its share buyback program and has targeted repurchases of $250 million in the current quarter.
Shares declined about 1% in extended trading after closing at $15.39 in New York. The stock has jumped 30% this year.
Sales at HPE’s biggest unit, Compute, fell 9% to $3.1 billion. Storage revenue rose 4% to $1.2 billion. The Intelligent Edge unit, which sells devices used to connect and manage previously unconnected gear, gained 27% to $867 million.
(Updates with order statistics in the seventh paragraph.)
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