Six key takeaways from Dell and HP results showdown

The two giants of the industry went head to head with quarterly numbers last night

1) Shares shoot upwards

Dell and HP's share prices both leapt by as much as five per cent last night as rocketing demand for their remote working tech fuelled stronger-than-expected results.

Despite the pandemic, HP posted flat revenues of $14.3bn in its Q3 ended 31 July, while Dell's three per cent revenue decline to $22.7bn in its Q2 ended 31 July was less severe than analysts had predicted.

2) Profiting from one PC per person move

The duo were helped along by strong PC market tailwinds.

HP led a Q2 PC market that rose 11 per cent, according to IDC, and HP revealed that its Personal Systems revenue leapt seven per cent in its latest quarter to $10.4bn on the back of "strong demand related to working and learning from home".

The assertion of Lenevo's CEO earlier this month that COVID will propel PC penetration from one per family to one per person was repeated by HP CEO Enrique Lores in a Bloomberg interview following the results.

"The PC is more essential to daily life than ever and PC use is up more than 20 per cent since COVID emerge," Lores added on an earnings call.

Dell's Client Solutions Group saw revenue fall five per cent to $11.2bn, meanwhile, although COO Jeff Clarke was even more effusive about the forces of technological change COVID has unleashed.

"We've been talking about the fourth industrial revolution for a while, and now the pandemic has accelerated its arrival," Clarke said.

"Organisations have had to pivot quickly - first work from home and then learn from home. Now businesses are taking this opportunity to reinvent their models for a more connected, digital, automated, data intensive, and distributed future."

3) Commercial crunch continues

COVID has, however, fuelled contrasting fortunes for the consumer and commercial PC markets, with the former category booming and the latter declining for both vendors.

While HP saw consumer PC revenue rocket 42 per cent, its commercial PC revenue fell six per cent.

Similarly, Dell saw its consumer client revenue rise 18 per cent to $3.2bn and its commercial client revenue drop 11 per cent to $8bn, meanwhile.

4) Printer positivity

The print market has taken a battering during the pandemic, with HP seeing managed print page volumes down by around 40 per cent in April.

Lores, however, said that HP's print business performed "better than we expected" in its Q3, despite revenues falling 20 per cent to $3.9bn.

By July, the year on year decline in managed print page volumes had improved to about 25 per cent, Lores indicated.

"While there remains much uncertainty about the phasing and pace of recovery, this is an early indication of office usage heading in the right direction," he said.

5) VMware brings the flair for Dell

Despite its potential involvement in a spin off from Dell, VMware was the star performer for its parent company in its latest quarter, growing revenue 10 per cent to $2.9bn.

During the quarter, a major EMEA bank deployed VMware's VDI and cloud technology to move 200,000 of its 280,000 employees to work from home, Dell said.

In contrast, Dell's Infrastructure Solutions Group revenue fell five per cent to $8.2bn, with storage revenue down four per cent.

6) Pandemic peregrinations

Having pulled its FY21 guidance during its Q1, Dell's Clarke admitted that "there continues to be a high degree of uncertainty for the remainder of this year".

"The latest global GDP and industry data indicates continuing but moderating declines for the second half of the year," he said, adding that he expects Q3 revenue to be seasonally lower than prior years.

In constant currency, HP saw quarterly revenues rise five and two per cent in APJ and EMEA, respectively, and fall four per cent in the Americas.

Talking about HP's managed print volumes, Lores said HP's fortunes are tied to the progress of the pandemic in each of its regions.

"In many Asian countries where the situation is much more under control we see volumes close to where they were before the crisis. In the US and in some of the Americas, where the impacts of the virus is still stronger, they are still behind significantly more behind that number [25 per cent down]," he said on an earnings call, a transcript of which can be found here.