NetApp’s fourth quarter earnings failed to meet the Street’s expectations, but its stock price shot up by more than 2.5 percent. This increase reflected the market’s positive response to the news that the company will issue a dividend and spend a sizable portion of its $7 billion cash stockpile on stock repurchases.

For the quarter ending April 26 NetApp reported net earnings of $173.8 million, a noticeable decline from the $180.7 million it raked in during the same period last year. The vendor’s per-share profit climbed to 69 percent, and revenue rose by 0.8 percent to $1.72 billion this year.

NetApp estimates that it will generate between 45 cents and 50 cents a share on $1.48 billion to $1.58 billion in the first quarter. This guidance falls short of the 53 cents and $1.6 billion analysts had in mind.

NetApp’s recent earnings and outlook reflect its struggle to keep up in the face of weakened demand in key sectors, but investors were willing to overlook its disappointing performance this time around. Management earned praise for the decision to increase its share repurchase program by $1.6 billion and issue a quarterly dividend of 15 cents a share. The latter will cost the company about $216 million a year.

“We commend the positive steps taken by NetApp today to improve both the capital and cost structure at the company,” Elliott portfolio manager Jesse Cohn said in a statement, adding that the fund considers NetApp “a highly valuable and strategic company.”

NetApp’s decision to make use of its cash reserve is a big win for Ellison – Paul Singer’s activist hedge fund owns over 4 million shares in the storage vendor. The move also validates the firm’s recent efforts to push for some high-level changes.