- The company also saw growth in revenue from servers and networking — two areas analysts thought might drag on Hewlett Packard Enterprise's top line.
- It's the company's first report since CEO Meg Whitman stepped down February 1, handing the reins to the president and veteran executive Antonio Neri.
Hewlett Packard Enterprise shares skyrocketed as much as 19 percent on Thursday after the company reported first quarter financial results that blasted past analysts' expectations on top and bottom lines.
Here's how the company did compared with what Wall Street expected:
- EPS: 34 cents vs. 22 cents expected according to Thomson Reuters
- Revenue: $7.67 billion vs. $7.07 billion expected according to Thomson Reuters
The company also saw growth in revenue from servers and networking — two areas analysts thought might drag on Hewlett Packard Enterprise's top line.
HPE reported storage revenue increased by 24 percent year-over-year, while data center networking revenue grew by 27 percent since last year.
Revenue from servers and storage declined in the year-ago quarter — 12 and 13 percent respectively, so analysts weren't expecting such a quick turn around.
CFO Tim Stonesifer attributed growth in storage revenue, both to organic causes and to the acquisition of flash storage technology company Nimble in fiscal 2017.
The company's financial services sector, which has excelled in the past year, also saw revenue increase by about eight percent.
In the year-ago quarter, HPE reported earnings of 28 cents per share, adjusted, on revenues of $6.9 billion.
Under new CEO Antonio Neri, Hewlett Packard Enterprises announced its intention to join the growing list of companies offering tax reform-based incentives to employees.
"Given the recent tax reform in the U.S., which will provide easier access to off-shore cash, we are increasing our shareholder return commitment and our investment in employees," Neri said in a statement.
Neri said the company will increase the matching contribution to qualifying employees' 401(k) programs, and invest in degree assistance programs for employees worldwide.
Shareholders will benefit, too.
The company plans to offer $7 billion in share repurchases and dividends to shareholders by the end of fiscal 2019
HPE issued strong earnings guidance for the upcoming quarter and fiscal 2018.
For the second quarter, HPE expects EPS of 29 to 33 cents versus 26 cents, according to analysts polled by Thomson Reuters.
Hewlett Packard Enterprise's outlook for full-year earnings proved stronger than Wall Street's, as well. HPE forecast a range of $1.35 to $1.45 EPS for fiscal 2018, whereas analysts polled by Thomson Reuters expected EPS of $1.18.
Hewlett Packard Enterprise's report comes at a key moment for the company.
CEO Meg Whitman stepped down February 1, handing over the reins to the president and veteran executive Antonio Neri, making the company's first quarter her last. When Whitman announced her impending departure in November, shares tanked 6 percent, despite an earnings beat.
Whitman, who served as CEO since 2011, oversaw the company's split into two brands. She remained CEO at the newly streamlined Hewlett Packard Enterprise, where she prioritized cloud services and spun off product and consumer hardware to HP. Her tenure at HPE saw a ramping up of acquisitions — eight in the last two years.
Whitman's legacy may well live on with Neri.
In HPE's earnings call, the new CEO reiterated his commitment to what he called Whitman's "rigorous discipline" and return on investment-based strategy for running the company.
Although he said the company is still focused on returning capital to investors, Neri said he feels HPE has the flexibility to also invest in innovation. This could mean a mix of internal investments, partnerships with or acquisitions of smaller companies.