Dell and HP go head to head in financial results

Vendors report quarterly figures and claim PC sales boom will continue long into 2021

Dell and HP have published quarterly figures, with both vendors predicting a boom in PC sales to continue far into 2021.

For the three months ending 31 January 2020, Dell grew net revenue by nine per cent to $26.11bn, while non-GAAP net income surged 19 per cent to $3.29bn.

Its Client Solutions Group business, which includes both commercial and consumer PC sales, grew revenues by 17 per cent during the quarter to $13.8bn

Dell's Infrastructure Solutions Group (ISG), which comprises datacentre technologies, reported flat revenues year on year in Q4 to $8.8bn.

Lastly, the VMware business posted an improvement in revenues for the quarter with sales up six per cent to $3.3bn.

HP's revenues meanwhile grew by seven per cent to $15.6bn for its Q1 ending 31 January, while earnings from operations grew by 52 per cent to $1.32bn.

Its Personal Computing segment, which includes notebooks, desktops and workstations, grew revenues by seven per cent to $7.37bn. The segment was driven by a 23 per cent spike in notebook sales in Q4 which made up for a steep 36 per cent decline in workstations and an 18 per cent decline in desktops.

HP's printing business meanwhile grew revenues during the quarter with sales up by seven per cent to $5.04bn driven by a 55 per cent increase in consumer sales.

HP's share price grew by five per cent yesterday as the Q4 results were published, while Dell's share price has largely unaffected.

On their respective earnings calls to investors, both HP and Dell's executives were optimistic about the year ahead.

HP CEO Enrique Lores said that the industry has entered a "new era" of innovation and growth for the PC.

"We think that many of the underlying trends that are driving demand today are going to stay. I think the pandemic has made technology clear necessary for people to work to entertain to live. And this is going to continue to drive very strong demand for PCs and for home printers for the foreseeable future, but especially for PC.

Meanwhile, pointing to IDC figures, Dell said that it shipped 50.3 million PC units in 2020 - the most it has ever shipped in a year.

Dell COO Jeff Clarke said he expects public sector organisations, particularly in education, to increase spending on PCs far into 2021.

"We're seeing the mobile form factor now represent roughly 75 per cent of the marketplace with desktops being 25 per cent of the marketplace," he said.

"That bodes well for public organisations that have been roughly 50/50 notebook and desktops, so they have some catching up to do there. We think that continues to fuel growth as we head in to the 2021 calendar year."

Clarke went on to claim that, among the top three PC vendors, Dell gained the most unit share in the commercial PC space with unit growth of 11 per cent year on year.

The COO also revealed that UK revenues across the Dell business grew by 18 per cent in Q4 - higher than its growth in the US (one per cent) and in China (12 per cent).

Dell is expecting its ISG and VMware business to improve as customers return to offices and the global economy picks up.

"We saw in our server business large bids respond back positively. Our small business and medium business sectors came back positively. So seeing growth in the server sector is I think very encouraging for us," said Clarke.

Meanwhile, HP is optimistic that its print business will continue to be lifted up by demand for home printing.

"The hybrid model of working between office and home opens new opportunities for us on the printing side to offer new services create new services by combining both. So overall we see that this is creating an opportunity for us not only to leverage new opportunities, but really to continue to drive change and to continue to gain momentum," said Lores.

'Progress' with Dell-VMware split

Both Dell and VMware executives revealed that there has been progress on a planned split of VMware from the Dell Technologies business. Clarke from Dell said that a tax-free spin could produce the most shareholder value through simplfying its capital structure and enabling more strategic flexibility.But the Dell exec emphasised that there is no guarantee a definitive agreement will be reached.On a seperate earnings call, VMware's interim CEO and CFO Zane Rowe said the firm is "making progress" on a spin-off from Dell.