Hewlett Packard Enterprise (HPE) has reported better-than-expected quarterly profits, with an adjusted earnings per share of 52 cents, surpassing the analysts’ average estimate of 50 cents. The “edge-to-cloud” technology firm attributed this positive outcome to a nearly 17% reduction in fourth-quarter expenses, totaling $6.84 billion.

However, despite the positive performance, HPE’s forecast for the current quarter presents a cautious outlook. Unfavorable macroeconomic conditions, including persistent inflation and higher interest rates, have compelled companies to trim IT spending, impacting enterprises like HPE. The company anticipates first-quarter revenue for fiscal 2024 to be in the range of $6.90 billion to $7.30 billion, with the midpoint falling slightly below estimates at $7.28 billion.

On an adjusted basis, HPE expects net earnings for the first quarter to be between 42 cents and 50 cents per share. The midpoint of this range is marginally below estimates of 47 cents. The challenging economic environment has led to a broader trend of cautious spending by enterprises, as indicated by other major IT services and software providers such as Accenture and Tata Consultancy Services.

In the fourth quarter, HPE reported a 7% decline in net revenue, amounting to $7.35 billion, slightly below the estimated $7.36 billion. The Compute segment, representing its largest segment, recorded quarterly revenue of $2.60 billion, reflecting a nearly 31% decrease compared to the same period last year. Despite these challenges, the annualized revenue run rate, a key indicator of future revenue, exhibited a positive trend, rising by 39% to $1.30 billion in the quarter ended October 31.