"Today's announced spin-merge of our non-core software assets with Micro Focus is another important step in our strategy to unlock a faster growing, higher margin, stronger cash flow company", she added.
Palo Alto-based HPE and Micro Focus will combine software products in application delivery management, big data, enterprise security, information management and governance, and IT operations management.
Kevin Loosemore, Executive Chairman of Micro Focus, will now spearhead the combined entity of HP Enterprise and Micro Focus. (HPQ). HPE in May announced plans to spin off and merge its enterprise-services division with Computer Sciences Corp.
The former Hewlett-Packard, which split into HP Inc. and HPE past year, built its enterprise software offerings through acquisitions such as the purchase of United Kingdom software company Autonomy, which cost more than $10 billion and led to accusations of fraud. Selling these assets to Micro Focus signals an end to HPE's Autonomy saga. According to reports, HPE had been trying to sell off its software assets for months.
The latest transaction, valued at approximately $8.8 billion (£6.6 billion), is the largest deal made by any United Kingdom company for some years and is expected to close in Q3 2017. If all goes as anticipated, it should close sometime between April and October next year. Net income soared to $2.27 billion, or $1.32 per share, thanks to a hefty gain on an asset sale.
The results exceeded Wall Street expectations. Analysts on that basis had predicted earnings per share of 44 cents on revenue of $12.64 billion.
Profit for the quarte rose to $2.27 billion or $1.32 per share, up from $224 million or $0.13 per share previous year. Revenues for the quarter dropped to $12.21 billion from $13.06 billion past year. On average, analysts surveyed by FactSet expect earnings per share of 61 cents. The company's shares surged by 21 per cent following the announcement and it is expected to have annual revenues of around $4.5 billion once the deal is completed. The adjusted forecast excludes gains from divestments of United States dollars 1.42 and restructuring costs of USD 1.23 per share. Once the latest transactions are closed next year, HP Enterprise's head count will have declined from about 210,000 to between 50,000 and 60,000, Ms. Whitman said.