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Investing in Hewlett Packard Enterprise (HPE)? Don't Miss Assessing Its International Revenue Trends

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Have you assessed how the international operations of Hewlett Packard Enterprise (HPE - Free Report) performed in the quarter ended April 2024? For this information technology products and services provider, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.

In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial health and growth trajectory. For investors, understanding a company's reliance on overseas markets has become increasingly crucial, as it offers insights into the company's sustainability of earnings, ability to tap into diverse economic cycles and overall growth potential.

Being present in foreign markets serves as protection against local economic declines and helps benefit from more rapidly expanding economies. Yet, such expansion also introduces challenges related to currency fluctuations, geopolitical uncertainties and varied market behaviors.

Our review of HPE's last quarterly performance uncovered some notable trends in the revenue contributions from its international markets, which are commonly analyzed and tracked by Wall Street experts.

The company's total revenue for the quarter amounted to $7.2 billion, marking an increase of 3.3% from the year-ago quarter. We will next turn our attention to dissecting HPE's international revenue to get a clearer picture of how significant its operations are outside its main base.

Decoding HPE's International Revenue Trends

Of the total revenue, $2.45 billion came from Europe, Middle East and Africa during the last fiscal quarter, accounting for 34.1%. This represented a surprise of +0.31% as analysts had expected the region to contribute $2.45 billion to the total revenue. In comparison, the region contributed $2.43 billion, or 36%, and $2.49 billion, or 35.7%, to total revenue in the previous and year-ago quarters, respectively.

Asia Pacific and Japan accounted for 22.3% of the company's total revenue during the quarter, translating to $1.61 billion. Revenues from this region represented a surprise of +7.42%, with Wall Street analysts collectively expecting $1.5 billion. When compared to the preceding quarter and the same quarter in the previous year, Asia Pacific and Japan contributed $1.52 billion (22.5%) and $1.57 billion (22.5%) to the total revenue, respectively.

Projected Revenues in Foreign Markets

It is projected by analysts on Wall Street that Hewlett Packard Enterprise will post revenues of $7.65 billion for the ongoing fiscal quarter, an increase of 9.3% from the year-ago quarter. The expected contributions from Europe, Middle East and Africa and Asia Pacific and Japan to this revenue are 34.9% and 21.3%, translating into $2.67 billion and $1.63 billion, respectively.

For the full year, the company is expected to generate $29.77 billion in total revenue, up 2.2% from the previous year. Revenues from Europe, Middle East and Africa and Asia Pacific and Japan are expected to constitute 35% ($10.43 billion) and 21.4% ($6.38 billion) of the total, respectively.

In Conclusion

The dependency of Hewlett Packard Enterprise on global markets for its revenues presents a mix of potential gains and hazards. Thus, monitoring the trends in its overseas revenues can be a key indicator for predicting the firm's future performance.

With the increasing intricacies of global interdependence and geopolitical strife, Wall Street analysts meticulously observe these patterns, especially for companies with an international footprint, to tweak their forecasts of earnings. Importantly, several additional factors, such as a company's domestic market status, also impact these earnings forecasts.

We at Zacks strongly focus on the dynamic earnings forecast of companies, given that empirical studies have demonstrated its potent impact on the immediate price movement of stocks. Invariably, there's a positive relationship -- upward earnings predictions often result in an increase in stock prices.

With an impressive externally audited track record, our proprietary stock rating tool - the Zacks Rank - harnesses the power of earnings estimate revisions and serves as an effective indicator of a stock's near-term price performance.

Currently, Hewlett Packard Enterprise holds a Zacks Rank #3 (Hold), signifying its potential to match the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Reviewing Hewlett Packard Enterprise's Recent Stock Price Trends

The stock has increased by 17.4% over the past month compared to the 3.3% rise of the Zacks S&P 500 composite. Meanwhile, the Zacks Computer and Technology sector, which includes Hewlett Packard Enterprise, has increased 6.4% during this time frame. Over the past three months, the company's shares have experienced a gain of 19.7% relative to the S&P 500's 4.1% increase. Throughout this period, the sector overall has witnessed a 7% increase.


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