HP And Dell Both Crushed Earnings Estimates as Covid Continues to Drive PC Sales -- Barrons.com
DOW JONES & COMPANY, INC. 5:41 PM ET 11/24/2020
Symbol Last Price Change | DELL | 70.33 | +0.95 (+1.3693%) | | HPQ | 21.75 | +0.56 (+2.6428%) | | QUOTES AS OF 04:10:00 PM ET 11/24/2020 |
Digital learning and work-from-home habits continue to fuel computing trends, boosting results for both Dell Technologies(DELL) and HP, Inc.(HPQ) in the in their latest quarters.
The pair of PC makers both reported better-than-expected earnings late Tuesday, though the companies got different reactions from investors. Shares of HP were up nearly 6% in after-hours trading, while Dell (DELL) was trading roughly flat.
HP topped Wall Street's consensus estimates, reporting fiscal fourth-quarter net income of $668 million, which amounts to 49 cents a share, compared with a profit of $388 million, or 26 cents a share, a year ago. Adjusted earnings were 62 cents. Revenue fell to $15.26 billion from $15.41 billion in the year-ago period. Analysts had modeled adjusted earnings of 52 cents a share on sales of $14.69 billion.
"The PC has become essential, across the consumer space," HP CEO Enrique Lores said in an interview with MarketWatch after the results. "This is driving increase in PC demand. Our results give us great confidence in our ability to drive long-term growth and shareholder value in 2021 and beyond."
HP said it expects fiscal first-quarter adjusted earnings of 64 cents to 70 cents, well above the consensus estimate of 54 cents a share. The company didn't offer sales guidance in the earnings release but said it planned to increase its dividend 10% in fiscal 2021.
HP said there was an 18% increase in its notebook sales, to $7.41 billion. Desktop sales still dropped 28% drop to $2.25 billion, compared with the year-ago period. Workstation system sales fell 45% to $419 million. Printer sales fell 3% to $4.83 billion, the bulk of which is supplies, accounting for $3.13 billion.
Dell, too, topped the Wall Street consensus and reported a fiscal third-quarter net profit of $881 million, or $ 1.08 a share, compared with $552 million, or 66 cents a share, a year ago. The company reported adjusted earnings of $ 2.03 a share. Revenue rose to $23.48 billion from $22.84 billion in the year-ago quarter. Wall Street had expected an adjusted profit of $1.42 a share and sales of $21.9 billion.
"Technology has never been more important, and as the world evolves, so does our business," Dell COO Jeff Clarke said.
The company said revenue for its unit that produces laptops and desktops rose to $12.3 billion, with consumer sales rising 47% and business sales rising 62% compared with the year-ago period. The company said that revenue from its commercial Chromebook segment tripled.
Dell stock has gained 37% this year, while HP is up 5.8%. The S&P 500 is up 13% in 2020.
Write to Max A. Cherney at max.cherney@barrons.com |
