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UPDATE 1-HPE posts steep revenue decline in key servers business

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May 31 (Reuters) - Hewlett Packard Enterprise Co on Wednesday reported a steep fall in revenue in its biggest business that sells servers, networking and data storage equipment, hurt by tepid demand, intense competition and a strong dollar.

Shares of Palo Alto, California-based HPE fell 2.4 percent to $18.39 in trading after the bell.

Revenue in HPE's enterprise group division, largely made up of its server and storage products, fell nearly 13 percent to $6.24 billion in the quarter ended April 30 the steepest decline in several quarters.

Servers revenue dipped 14 percent to $2.99 billion, while networking revenue plunged 30 percent.

Under Chief Executive Meg Whitman, HPE has inked a string of deals to sharpen its focus on its hardware business that sells servers, networking and data storage equipment to companies.

HPE created from the breakup of Hewlett-Packard Co in 2015 has shrunk by divesting its technology services unit and signing a deal to sell its software division.

Last month, HPE bought data storage provider Nimble Storage Inc for $1.09 billion.

HPE's results come following weak earnings reports from other big technology vendors including Cisco and IBM , which have faced slowing demand.

A strong dollar has eroded the value of HPE's overseas revenue. HPE gets over 60 percent of its revenue from outside the United States.

The company reported a net loss of $612 million, or 37 cents per share in the second quarter ended April 30, compared to a profit of $320 million, or 18 cents per share, a year earlier.

Revenue from continuing operations fell nearly 13 percent to $7.45 billion, largely reflecting the sale of its consulting and outsourcing services business.

Excluding items, the company earned 35 cents per share, in line with analysts' average expectation, according to Thomson Reuters I/B/E/S.

HPE's shares had climbed 8.5 percent this year, slightly outperforming the S&P 500 index's 7.7 percent gain. (Reporting by Pushkala A in Bengaluru; Editing by Sai Sachin Ravikumar)