What They Say
HP said that it plans to make cuts of 4,000 to 6,000 staff over the next three years because of declining sales of PCs which are hitting revenues and profits. In October last year, it had 51,000 staff. Revenue in the fourth fiscal quarter fell by 0.8% to $14.8 billion and ‘Personal Systems’ fell 13% to $10.3 billion with units dropping 21% and consumer revenue down 25%. The margin in that group fell from 6.9% to 4.5% on a quarterly basis.
Dell also reported and said Q3 revenue was down 6% YoY but operating income was up 68% to a record $1.8 billion. Client Solutions revenue was down 17% to $13.8 billion with commercial revenue of $10.7 billion, down -13%,, and consumer revenue $3 billion, down -29%. The key to the good result was good growth in Servers and Storage which were both up. For three quarters of the year, Dell is up 6% in revenue, but the firm said that Q4 looks ‘bleak’.
What We Think
The PC business has never been easy, but is really hard work at the moment. Separately, Amazon is reported by Business Insider to be losing $10 billion per year in its Digital group, which includes the Alexa business, but the firm has said that it still has ‘conviction in pursuing’ Alexa. (BR)
