What They Say
HP Inc and Dell both reported their most recent quarterly data.
For HP, the quarter to the end of October was the fourth quarter in its fiscal year, while for Dell, the period to 29th October was its third quarter.
HP saw its year on year sales down 3.6% to $56.6 billion while the fourth quarter was down 1% to $15.3 billion. Earnings were down from $3.4 billion to $3.2 billion for the year, down 5%. and 7% down in Q4. The firm’s systems division was flat year on year and with a 5/1% operating margin. It consumer revenues were up 24% while commercial sales were down 12%. Notebooks were up 7% in volume, while desktop PCs were down 31%.
Dell revenues were up 16% on last year for the three quarters to date at $79 billion, while its Q3 was up 21% to $28.4 billion. Net income was $5.7 billion for the YTD, while it was $3.9 billion for Q3 alone. The firm saw ‘Client Solutions’ revenue up 35% to $16.5 billion and operating revenue was a record of $1.1 billion. Commercial revenue was up 40% and consumer revenue was up 21% at $12.3 billion and $4.3 billion, respectively.
What We Think
I haven’t been watching the PC market as closely in the last couple of years as I had for the previous four decades. When I compared the results, I was surprised to see how far Dell had got ahead of HP in revenues. HP remains above Dell according to IDC although the last year has seen Dell get much closer since Q3 last year. In Q3 2020, HP had 22.4% share vs 14.4% for Dell, whereas this time their shares were 20.3% vs 17.5%, respectively. Lenovo remains top in terms of volume for PCs, but between Dell and HP at $17.9 billion revenue in its Q2 to the end of September.
Of course, HP split its business between the Enterprise division (Hewlett Packard Enterprise/HPE) and the PC & printer business. If you add back the $6.9 billion to the HP Inc it would be closer to Dell at $22.2 billion so 22% less than Dell. (BR)
