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HP And Dell Post Strong Quarterly Results, HP Beats Revenue Expectations


11/30/2018


HP And Dell Post Strong Quarterly Results, HP Beats Revenue Expectations
HP reported its fourth quarter revenues higher than what analysts were expecting which helped its stocks to surge in late trading on Thursday as the company ended a positive quarter.
 
The Palo Alto, California-based company reported a net income of $1.5 billion, or 91 cents per share for its fourth quarter of the current fiscal year. On an adjusted basis, the earnings came in at 54 cents per share which is the same as was being expected by Wall Street analysts at 54 cents per share.
 
The revenue generated by the company in the fourth quarter of fiscal 2018 increased to touch $15.4 billion which was higher than the $15.1 billion which was being expected by analysts. This figure was also a 10 per cent over the revenues generated by HP in same period of fiscal 2017.
 
For the complete fiscal year, HP reported a year-on-year increase of 12 per cent in its revenues at $58.5 billion while reporting full year earnings of $5.3 billion, or $3.25 per share. Additionally, for the full fiscal, the company generated free cash flow of $4.2 billion.
 
There was an increase of 11 per cent in revenues from its personal systems for the fourth quarter and a 9 per cent rise in its printing business compared to the same period a year ago. There was also a 11 per cent rise in revenues for its hardware units for the same period year-on-year.
 
The positive results of the company especially on its revenue front, caused its shares to rise by about 1.3 per cent. 
 
On the other hand, its competitor Dell Technologies marked a 15 per cent hike in its third quarter revenues on Thursday itself because of the demand for upgrades of their systems for businesses which and the transformation from the older Windows technology. The company also gained from a strong performance by software maker VMware.
 
The results could also influence a scheduled voting for an offer of buy back of 81 per cent economic stake of Dell in VMware. If this buyback goes through, the company would be able to return to the public markets and avoid the typical rigorous exercises associated with the issuing of initial public offerings.
 
"We expect the transaction to close in this calendar year, with the projected close date and first day of trading for the Class C common stock on the NYSE under the ticker symbol 'DELL' on December 28," Dell's head of investor relations Robert Williams said on a conference call with analysts.
 
The Client Solutions Group of Dell reported an 11 per cent hike in revenue. This business unit consumer product such as desktop PCs, notebooks and tablets as well as some branded peripheral products.
 
"The market has reached a state of stabilization so far this year, primarily driven by strong commercial demand driven by Windows 10 upgrades, being linked to end of Windows 7 support," said Ishan Dutt, an analyst with research firm Canalys.
 
According to data from Canalys, Dell however trailed HP in the global PC market share for the current year with a 17 per cent share compared to HP’s 23 per cent. It also trails Lenovo Group with enjoys a 21 per cent share.
 
"Where we have incurred in higher cost with tariffs, we can pass that through to end users," Chief Operating Officer Jeffrey Clarke said.
 
(Source:www.investorplace.com & www.tech.economictimes.com)