HPE (Hewlett Packard Enterprise) is happy about its latest quarterly results, with quarterly net revenues up 11 per cent to $7.7 billion, exceeding analysts’ expectations. The company enjoyed a 24 per cent increase in storage revenue, year on year; and a 27 per cent increase in DC networking, both functions for which are within the company’s hybrid IT division. Revenue from this division overall rose by 10 per cent. Revenue from data analysis division Intelligent Edge increased by nine per cent, year on year.

Shares in the company rose quickly when the results were announced, then rose again after the company announced a $7 billion share buyback program, which will mean a 50 per cent dividend increase by the end of 2019. Following Cisco’s similar move last week, HPE is responding to recent changes to the US tax system designed to encourage companies to repatriate a greater share of overseas earnings. As with Cisco, however, the buyback scheme will reduce to some extent resources available for corporate acquisitions in the short to medium term.

At present, HPE seems to be coping well with ever-increasing levels of competition in the cloud computing sector. Analysts have suggested it will also be helped by demand for new servers from companies with hardware at risk of compromise from the Spectre and Meltdown security flaws.

“Our strong Q1 performance is proof that we have the right strategy and improved execution,” said HPE CEO Antonio Neri, who has only been in post for a few weeks. “We had good revenue growth across every business segment, continued to execute [ongoing internal restructuring project] HPE Next with no disruption to the business and delivered strong shareholder return in the form of share repurchases and dividends.”

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