Hewlett Packard Enterprise (HPE) reported a notable 10% year-over-year revenue increase for its third fiscal quarter of 2024, totaling $7.7 billion.

The company successfully met its revenue forecast for the quarter ending July 31, driven primarily by strong sales of AI systems and traditional servers.

In a show of confidence, HPE returned $221 million to shareholders through share repurchases and dividends, maintaining its commitment to shareholder returns.

Under the leadership of CEO Antonio Neri, HPE raised its adjusted earnings forecast for the fiscal year to between $1.92 and $1.97 per share, up from a previous range of $1.85 to $1.95.

Despite a slight decline in share price, HPE's stock remains approximately 13% higher than at the beginning of the year, closing at $19.16.

Investor sentiment in the IT hardware sector remains mixed, with enterprise storage demand slightly below expectations, although improvements in AI server supply are noted.

While the company raised its profit guidance, it kept its full-year revenue forecast unchanged, which disappointed some investors hoping for stronger AI-driven sales growth.

The Server division saw a significant 35% increase in sales, generating $4.3 billion, while both the Intelligent Edge and Hybrid Cloud segments experienced declines.

The recovery in the personal computer market, particularly due to increased demand for AI-capable systems, has contributed to HPE's overall performance.

Analysts suggest that a recovery in demand for cloud storage and networking equipment could lead to an upward revision of HPE's full-year projections.

HPE announced a dividend payment of $0.30 per share, reflecting its ongoing commitment to returning value to shareholders.

Looking ahead, CEO Antonio Neri expressed confidence that the ongoing acquisition of Juniper Networks will enhance HPE's edge-to-cloud strategy and deliver shareholder returns.