Shares of business-intelligence and technology-solutions company Hewlett Packard Enterprise (HPE 3.52%) jumped as much as 10.8% on Friday, following the company's first-quarter results for fiscal 2018, as well as the announcement of a $7 billion capital return and a significant dividend increase. The stock is up about 10% at the time of this writing.
Though the company's significant capital return program and higher-than-expected first-quarter revenue and adjusted earnings per share may have played key roles in investor optimism toward the stock on Friday, another notable takeaway from the earnings report is HPE's strong guidance.
HPE's fourth-quarter revenue was $7.7 billion, up 11% year over year and significantly higher than a consensus analyst estimate for revenue of about $7.1 billion. First-quarter non-GAAP earnings per share of $0.34 were similarly up nicely, rising from $0.28 in the year-ago quarter. On average, analysts were expecting non-GAAP EPS of just $0.22.
For the full year of fiscal 2018, HPE management said it expected non-GAAP EPS to be between $1.35 and $1.45, well ahead of a consensus analyst estimate for $1.18 during this period.
HPE's confidence in its strategy and execution was highlighted by its strong guidance, but was also demonstrated in the company's robust capital return program and meaningful enhancements to its employee perks.
"We now plan to return $7 billion to shareholders in the form of share repurchases and dividends by the end of FY19, including a 50% increase in our dividend," said HPE CEO Antonio Neri. "In addition, we will significantly increase the matching contribution for our employees' 401(k) program and create new degree assistance programs to encourage development and learning for employees around the world."