HPE revenue, profit top estimates; shares jump

(Reuters) - Hewlett Packard Enterprise Co HPE.N reported better-than-expected quarterly revenue and profit on Thursday, boosted by higher sales of its storage and data center networking products, sending its shares up 11 percent in extended trading.

FILE PHOTO: A trader passes by the post where Hewlett Packard Enterprise Co., is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 25, 2016. REUTERS/Brendan McDermid/File Photo

HPE, known for its computer servers, also forecast an adjusted profit of 29 cents to 33 cents per share for the second quarter. Analysts on average were expecting a profit of 26 cents, according to Thomson Reuters I/B/E/S.

HPE’s newly appointed chief executive, Antonio Neri, said the company plans to return $7 billion to shareholders in the form of share repurchases and dividends by the end of fiscal 2019 due to the recent U.S. tax reform.

The plan includes a 50 percent increase in dividend starting from the third quarter, Neri said in a statement.

“My commitment to shareholders is to deliver transparency, predictability and consistency,” Neri told Reuters in a phone call on Thursday.

Neri recently replaced Meg Whitman, who surprised Wall Street last quarter by stepping down as CEO after transforming HPE into a company that focuses on areas such as networking, storage and technology services.

“We would not be here if it was not for Meg’s leadership in the last six-and-a-half years. She put us on a great path,” Neri said. “My opportunity here is to accelerate our strategy.”

Palo Alto, California-based HPE said on Thursday that revenue in its Hybrid IT division, largely made up of the company’s storage and data center networking products, rose 10 percent to $6.33 billion in the first quarter.

Total revenue rose 11 percent to $7.67 billion, edging past analysts’ average estimate of $7.07 billion.

HPE’s net income jumped to $1.43 billion in the quarter ended Jan. 31 from $267 million a year earlier on the back of a tax gain.

On a per-share basis, earnings were 89 cents per share, compared with 16 cents per share last year.

Excluding items, the company earned 34 cents per share in the latest quarter, much higher than the average analyst estimate of 22 cents.

The company’s shares, which closed at $16.41, were at $18.16 in after-hours trading on Thursday.

Reporting by Arjun Panchadar in Bengaluru; Additional reporting by Salvador Rodriguez; Editing by Maju Samuel and Chris Reese