HPE: Fiscal 3Q16 Financial ResultsLowest storage revenue since 1FQ13 !
By Jean-Jacques Maleval on 2016.09.09
|(in $ million)||3Q15||3Q16||9 mo. 15||9 mo. 16|
Hewlett Packard Enterprise Development LP (HPE) announced financial results for its fiscal 2016 third quarter, ended July 31, 2016.
Enterprise Group revenue was $6.5 billion, down 8% Y/Y, flat when adjusted for divestitures and currency, with a 12.6% operating margin. For the same period, servers revenue declined by 4% and 2% adjusted.
Storage revenue was down 8% at $724 million and 5% with the same adjusments with continued declines in the legacy portfolio more than offsetting growth in converged storage of 1% that was impacted by a softer than expected market, according to the company.
It added that 3Par all-flash performance grew 70% Y/Y and that 3Par, plus XP, plus SVA was up 5%.
Margins in storage increased yearly driven by favorable converge mix and improved pricing in all-flash.
$724 million is the lowest figure for HPE or HP storage revenue since at last 1FQ13! (see table below). It's far from $952 million in 4FQ13.
Tim Stonesifer, CFO, commented: "Despite a challenging market, we estimate we gain share in the second calendar quarter, our eleventh consecutive quarter of share gains. And we continue to expect storage to gain shares through the remainder of the year."
President and CEO Meg Whitman added: "The storage performance was not as strong in Q3 as we saw last quarter I think because there was a weaker margin - I mean weaker market, but we also increased margins and we expect to take about a 0.5 point of share year-over-year in the second quarter."
If HPE is gaining market share with revenue declining since six months, it must be very serious for its competitors.
Storage represents now 11% of the HPE Enterprise Group and 6% of global revenue.
It has to be proven that the Dell/EMC will be positive for HPE storage as the new giant duo has a much larger storage portfolio pushed by an increased technical and sales force.
HPE announced during the earnings call a partnership with GE Digital that will enable industrial analytics from the edge to the cloud. HPE will be a preferred storage and server infrastructure provider for GE's Predix cloud technologies.
Furthermore, Dropbox moved the majority of its cloud storage business to HPE and away from AWS.
Quarterly revenue for HP storage only
(without services, in $ million)
| Fiscal quarter