Image source: Hewlett-Packard Enterprise Co.

What: Shares of Hewlett-Packard Enterprise Co. (NYSE:HPE) rose after the company released strong fiscal first-quarter 2016 results.

So what: Quarterly revenue fell 3% year over year, to $12.72 billion, but would have climbed 4% had it not been for the negative effects of foreign currency exchange. Based on generally accepted accounting principles (GAAP), that translated to an 80.7% decline in net earnings, to $267 million, or $0.15 per diluted share, down from $1.385 billion, or $0.75 per share in the same year-ago period. On an adjusted (non-GAAP) basis -- which excludes line items like stock-based compensation and restructuring charges, and keeping in mind that Hewlett-Packard Enterprise only just completed its separation from HP late last year -- Hewlett-Packard Enterprise's net income fell a much more modest 27.5% year over year, to $731 million, or $0.41 per share.

That might not seem impressive, but analysts, on average, were slightly less optimistic on both the top and bottom lines. Consensus estimates called for revenue of $12.68 billion, and adjusted earnings of $0.40 per share.

"During our first quarter as an independent company," elaborated Hewlett-Packard Enterprise CEO Meg Whitman, "we saw the progress that comes from being more focused and nimble. We delivered a third-consecutive quarter of year-over-year constant currency revenue growth, and excluding the impact of recent M&A activity, we saw revenue growth in constant currency across every business segment for the first time since 2010."

Now what: For the current quarter, Hewlett-Packard Enterprise anticipates adjusted diluted earnings per share of $0.39 to $0.43, and GAAP diluted EPS of $0.13 to $0.17. For the full year, HPE expects adjusted diluted EPS of $1.85 to $1.95, and GAAP diluted EPS of $0.75 to $0.85. By comparison, analysts were modeling full-year EPS of $1.87, near the low-end of HPE's guidance range.

What's more, HPE expects to generate free cash flow in fiscal 2016 in the range of $2.0 billion to $2.2 billion. And after returning $1.3 billion to shareholders last fiscal year in the form of dividends and repurchases, HPE is increasing its commitment to return at least 100% of that free cash flow to shareholders this year. Finally, when HPE's previously announced deal with China's Tsinghua closes -- likely in May, as HPE is working through final regulatory approvals in China -- HPE will use the majority of its $2 billion in proceeds to repurchase shares.

All things considered, this was a great start to Hewlett-Packard Enterprise's life as an independent business. And while its current growth isn't exactly overwhelming, long-term investors should be happy knowing the company is willing to reward them through aggressive capital returns as it continues to solidify its industry leadership position.

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