HPE, Cisco achieved better revenue growth than IBM

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Networking majors Hewlett Packard Enterprise (HPE), IBM and Cisco have shared their quarterly financial results in the recent weeks.

While HPE and Cisco achieved marginal growth in quarterly revenue in their latest quarter, IBM showed lack of stability in its business.

Hewlett Packard Enterprise

Excellent performance in servers, storage, networking and converged infrastructure and enterprise services has helped Hewlett Packard Enterprise (HPE) to raise its revenue in the fiscal 2016 second quarter, ended April 30, 2016.

HPE net revenue increased 1 percent to $12.7 billion.  It has generated $7 billion from Enterprise Group, up 7 percent from the previous year.

Enterprise Services revenue decreased 2 percent to $4.7 billion and software revenue dropped 13 percent to $774 million. Revenue from financial services was down 2 percent to $788 million.

Within Enterprise Group, HPE’s server revenue was up 7 percent, Storage revenue was up 2 percent, networking revenue was up 57 percent, and Technology Services revenue was down 6 percent.

Within Enterprise Services business, HPE’s Infrastructure Technology Outsourcing revenue was down 1 percent, and Application and Business Services revenue was down 3 percent.

Within Software business, HPE’s License revenue was down 12 percent, support revenue was down 16 percent, professional services revenue was down 3 percent, and software-as-a-service (SaaS) revenue was down 11 percent.

HPE CEO Meg Whitman says these results represent HPE’s best performance since she joined in 2011.

HPE claims that it is the only major vendor to gain share in external disk storage over the last two years, while EMC, NetApp, IBM and Dell lost share. Revenue in HPE’s 3PAR all-flash business grew nearly triple digits, about two times faster than the market.

HPE is seeing acceleration of business in networking, after the acquisition of Aruba and partnership with Unisplendour, a subsidiary of Tsinghua in China.

“Our results are in stark contrast with the results Cisco reported last week. In switching, HPE grew 18 percent versus Cisco that was down 3 percent,” said Meg Whitman.

HPE posted revenue growth in constant currency in every region and outright growth in the Americas and Asia Pacific Japan.

HPE’s performance in Americas continues to support cautious optimism for the remainder of the year. HPE faces currency related challenges in EMEA. Networking drove strong performance in China.

Cisco

Networking major Cisco has posted revenue of $12 billion ($12.1 billion) and net income of $2.3 billion ($2.4 billion) in Q3 fiscal 2016.

Cisco attributes third quarter growth to strong execution; continued strong margins and momentum in growth areas, despite uncertain macroeconomic environment.

Cisco’s Q3 revenue — excluding SP Video CPE business — increased 4 percent to $7,062 million in Americas, fell 2 percent to $3,001 million in EMEA, and grew 10 percent to $1,937 million in Asia Pacific Japan and China.

Segmental growth showed that Cisco achieved revenue growth of 17 percent to $482 million in security. Revenue from collaboration climbed 10 percent to $1,069 million. SP Video revenue was up 18 percent growth to $468 million.

Cisco’s wireless business rose 1 percent to $615 million. Data center revenue increased 1 percent to $811million.

Switching revenue of Cisco fell 3 percent to $3,447 million and NGN routing revenue decreased 5 percent to $1,894 million.

During the third quarter of fiscal 2016, Cisco completed acquisitions of Jasper Technologies , Acano, Synata,  Leaba and CliQr.

With these acquisitions, Cisco focuses on key growth areas including IOT, software cloud and collaboration.

With three consecutive quarters of growth, Cisco has included security as one among its absolute highest priorities.

While the overall macro environment remains uncertain, Cisco Director & CEO Chuck Robbins said, “We are nicely positioned to benefit from any rebound in the global economy.”

IBM

Armonk, New York-based IBM’s first-quarter revenues declined 5 percent to $18.68 billion from $19.59 billion last year. This marked the 16th straight quarter the company has reported lower revenues.

Cognitive solutions revenues dropped 1.7 percent to $4 billion, while global business services declined to 4.3 percent to $4.1 billion. Technology services and cloud platforms declined 1.5 percent to $8.4 billion, while systems revenues dropped 21.8 percent to $1.7 billion.

First-quarter profit dropped to $2.02 billion or $2.09 per share from $2.42 billion or $2.36 per share last year.

IBM announced or closed 10 acquisitions during the quarter. In April, IBM had closed its $2.6 billion acquisition of Truven Health Analytics.

IBM maintains its full-year 2016 adjusted earnings forecast of at least $13.50 per share.

As the world goes digital every day, the enterprise IT vendor is looking to explore new opportunities.

“We’ve been shifting investments and, resources and as we move our business forward we’ve also changed the way we run our business to be more aligned with these opportunity areas,” said Martin Schroeter, chief financial officer of IBM.

Arya MM
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  • Pat Frank

    Not a very good article. IBM delivered GAAP diluted earnings of $2.09 per share on $18.7 billion in total revenues compared to HPE’s recent Q1 2016 financial announcement which showed $12.7B in total revenues but just $0.15 in GAAP diluted earnings per share.