Whitman: Strong results show commitment to HPE
Despite talk that she might leave for Uber, CEO says it ‘was not the right fit’
Meg Whitman just showed Uber’s board the turnaround story they so long to hear: Hewlett Packard Enterprise, the company she nearly left for the ride-hailing start-up, finally putting its complicated past behind it.
Whitman’s architectural blueprint for HP was on display as HPE topped Wall Street forecasts for sales and profits. Shares rallied late Tuesday, then slid Wednesday and Thursday.
The results could signal a turning point for the company following its 2015 split from HP Inc. And HPE CEO Whitman nearly missed their unveiling: In late August, Whitman was one of three finalists for the Uber job that ultimately went to Expedia CEO Dara Khosrowshahi.
“(Uber) was not the right fit and had nothing to do with (my situation at) HPE,” Whitman told USA TODAY this week while discussing HPE’s third-quarter results. “We have a very special opportunity here. I’ve devoted six years of my life here, and we have plenty of work to do.”
When Whitman did not work out a deal with Uber’s board, some investors turned their attention to her commitment at HPE, where she made more than $35 million in cash and stock last year even as shares underperformed the market. HPE stock is down 5% this year, lagging the Nasdaq 100’s 21% gain.
“Uber is interesting — it is very similar to eBay,” said Whitman, who was eBay’s CEO for a decade. “But we have more change ahead at HPE, becoming faster, nimbler, more agile. We are re-architecturing the company.”
The company announced third-quarter revenue ($8.21 billion, up 3%) and adjusted earnings per share (30 cents per share) that surpassed results projected by analysts.
Highlighting the quarter was double-digit growth in networking (16%), storage (11%) and financial services (10%) — “all very positive signs,” says Patrick Moorhead, an analyst at Moor Insights & Strategy.
The better-than-expected results highlight what Whitman has increasingly said: HPE is entering a new phase of growth and innovation after spending the better part of the last few years restructuring and spinning off operations.
HPE’s results should go a long way toward reassuring HPE investors, independent technology analyst Jack Gold says.