Dell Technologies and HP Inc. have reported quarterly earnings that reflect a stagnation in the anticipated recovery of the personal computer market. Both companies saw their stock prices decline in after-hours trading following the announcements.
For the third fiscal quarter ending in October, Dell's PC business revenue fell by 1% to $12.1 billion, missing expectations. Meanwhile, HP's PC segment sales grew by 2% to $9.59 billion, but still fell short of analysts' average forecasts.
Dell's CFO, Yvonne McGill, indicated that the PC upgrade cycle is expected to extend into next year. HP's CEO, Enrique Lores, noted that the latest Windows operating system release by Microsoft has not driven corporate PC sales as swiftly as previous versions.
During the early months of the COVID-19 pandemic, demand for new laptops surged as students and employees worked from home. However, the market has since experienced a historic decline. Industry analyst IDC reported a drop in shipments in the third quarter, despite signs of a rebound earlier this year.
PC manufacturers had hoped that new machines, touted as better suited for AI workloads, would boost demand. However, Gartner analyst Mikako Kitagawa remarked that buyers have yet to see clear benefits or business value from these offerings.
Dell's stock dropped over 10% in after-hours trading, though it has risen 85% year-to-date. HP's stock fell nearly 8% after-hours, with a year-to-date increase of 30%.
For the fiscal quarter ending January, Dell forecasts revenue of approximately $24.5 billion, below the analyst average of $25.4 billion, with adjusted earnings per share between $2.40 and $2.60, compared to the expected $2.66. HP also provided a disappointing outlook, projecting earnings per share of $0.70 to $0.76, against the analyst consensus of $0.86.
