Revenues surged to $7.67 billion, well above the $7.07 billion expected
Hewlett Packard Enterprise, or HPE, saw its shares soar up by as much as 19% in its first quarter financial results thanks to growth in the firm’s servers and networking arm.
Despite the aformentioned areas expected to pull HPE's revenues down, the firm posted revenue of $7.67 billion, well above the $7.07 billion expected, according to Reuters. This surpassed analysts' expectations on both top and bottom lines.
HPE also reported storage revenue increased by 24% year-over-year, while data centre networking revenue grew by 27%. However, revenue from servers and storage saw a decline compared to the same quarter a year ago, although only by 1% from 12 to 13%.
The company's financial services sector, which has excelled in the past year, also saw revenue increase by about 8%.
Under new CEO Antonio Neri, HPE announced it will be joining a growing list of companies offering tax reform-based incentives to employees, to help boost the company’s success even further.
“Given the recent tax reform in the US, which will provide easier access to off-shore cash, we are increasing our shareholder return commitment and our investment in employees,” said Antonio Neri, President and CEO of HPE.
“We now plan to return $7 billion to shareholders in the form of share repurchases and dividends by the end of the financial year 2019, including a 50% increase in our dividend. In addition, we will significantly increase the matching contribution for our employees’ 401,000 program and create new degree assistance programs to encourage development and learning for employees around the world.”
Shareholders will benefit, too, Neri said, as the company plans to offer $7 billion in share repurchases and dividends to shareholders by the end of fiscal 2019.
For the second quarter, HPE expects an earnings per share of 29 to 33 cents compared to the 26 cents of this quarter, according to analysts at Reuters.