HP sees office reopenings lifting PC demand ahead of promising holiday season3 min read . Updated: 24 Nov 2021, 09:04 PM IST
- Dell also posts strong results, aided by commercial PCs and sales of high-end consumer devices
HP Inc. reported strong earnings and gave an upbeat outlook, aided by office reopenings and an expectation for healthy consumer demand through the holiday shopping season despite supply shortages.
The PC and printer maker on Tuesday said it generated quarterly sales of $16.7 billion, up 9.3% from the year-ago period, and $3.1 billion in net income, including a one-time $1.78 billion legal settlement. The results beat Wall Street expectations for both sales and earnings.
“We are seeing strong demand coming from the commercial side, from the office side because offices are reopening and companies are invested in creating a better experience for their employees," HP Chief Executive Enrique Lores told The Wall Street Journal.
Commercial PC revenue grew 25%, the company said, while consumer PC sales retreated 3%, from their lofty levels a year ago.
HP shares that rose 0.8% to $32.19 Tuesday advanced more than 5% in after-hours trading on the results.
Dell Technologies Inc. also posted strong results Tuesday after the bell, sending its shares up more than 0.6% in after-hours trading. The company said it reported its strongest-ever third quarter, with sales of $26.4 billion and net income of $3.9 billion. Commercial PC and high-end consumer devices saw strong growth, the company said.
Demand shot up for computers during the pandemic as people scrambled to secure devices for tasks such as remote working and distance learning. The global PC market has grown for six consecutive quarters, according to International Data Corp. But the world-wide chip shortage and global supply chain problems have stopped sales from taking off even more.
The pandemic had a mixed effect on HP. Its PC business boomed and the sale of home printers also increased, though the widespread shutdown of offices, before they began to reopen, weighed on its ability to revitalize its important print-services business.
In the most recent quarter, HP ranked second in world-wide PC shipments, close behind Lenovo Group Ltd. and beating out Apple Inc. and Dell Technologies, according to IDC. But its shipments were down almost 6% from the previous year while nearly all of the other top companies’ shipments increased year-over-year. Mr. Lores said the company was able to deliver strong results in part by emphasizing shipments of more-lucrative models.
Supply constraints amid sustained demand are expected to continue into next year. “Demand—at least for the first half—will continue to outpace supply," HP Chief Financial Officer Marie Myers said.
Dell, which didn’t see the shipment drop HP experienced according to IDC, also has been wrestling with shortages, though. Dell Chief Operating Officer Jeffrey W. Clarke said he expects to still face those next year.
Chip makers are pouring money into trying to alleviate the processor shortages. Taiwan Semiconductor Manufacturing Co., the world’s leading contract chip maker, Samsung Electronics Co. and Intel all have unveiled big chip factory plans to boost manufacturing capacity in the coming years.
HP said it expects to generate per-share earnings of $0.92 to $0.98 in the current quarter and $3.86 to $4.06 for the full fiscal year ending Oct. 31, 2022, both ahead of Wall Street expectations.
The outlook, Mr. Lores said, is driven by “both sustained strong demand from the commercial side as we have seen this quarter but also by consumer demand being strong as we go through the holiday season."
Dell says it expects revenue in the current quarter to increase at least 12% from the year-ago period and reach $27 billion to $28 billion, beating expectations. Growth should continue next year, Chief Financial Officer Tom Sweet said on an analysts call.
This story has been published from a wire agency feed without modifications to the text
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