PCs are back as Dell, HP deliver strong sales for desktops and notebooks
Robust demand is projected to stretch into next year despite chip shortage
A pandemic-fueled run on computers helped HP Inc. and Dell Technologies Inc. deliver strong financial results for the latest quarter despite a semiconductor shortage that is denting some industries.
Dell on Thursday reported that first-quarter revenue rose 12% to $24.5 billion from a year earlier driven by a 42% jump in consumer revenue within the client solutions group that includes desktops and notebooks. The strong start to its business year comes after Dell, in February, reported record full-year revenue.
Personal-computer sales registered their strongest growth in a decade last year, underscoring a shift from mobile devices brought on by the coronavirus pandemic, according to industry data. PC shipments overall rose 13% in 2020 and are expected to increase 18% in 2021 despite the semiconductor shortage, according to International Data Corp.
DELL PLANS SPINOFF OF $52 BILLION STAKE IN VMWARE
"We continue to see very strong demand on the consumer side, and the demand on the commercial side is also starting to strengthen as offices reopen," said HP Chief Executive Enrique Lores.
|DELL||DELL TECHNOLOGIES INC.||47.27||+1.81||+3.98%|
HP expects personal computers to remain a hot item into next year, he said Thursday, as the company posted a roughly 27% jump in second-quarter revenue and raised its full-year earnings outlook. Consumer sales increased strongly, rising 72% in the computer business and 77% in the printing segment, the company said,
The global semiconductor shortage, Mr. Lores said, is likely to persist throughout the year, helping extend the boom time for laptop sales into 2022.
HEWLETT PACKARD LEAVES CALIFORNIA FOR TEXAS
The strength of demand has been echoed by others. Intel Corp. Chief Executive Pat Gelsinger, who previously led Dell’s majority-owned VMware Inc., pointed to the PC resurgence during the chip maker’s first-quarter earnings call in April. The company had shipped a record number of notebook central processing units, during the prior quarter, he said.
"And as the world becomes more digital, I believe we have 10 good years of semiconductors in front of us," he said at an industry event this month.
On Thursday, Dell Chief Operating Officer Jeff Clarke pointed to the company’s results, including record revenue.
"There has been a substantial acceleration in digital transformation across the globe and you can see it in our results with record first quarter revenue of $24.5 billion," he said in a written statement, adding: "Looking ahead, we see technology becoming increasingly central to the global economy and society."
HP and Dell, the Nos. 2 and 3 PC vendors, shipped roughly 19 million and 13 million units, respectively, in the first three months of 2021, or increases of 64% and 23% from the comparable year-earlier period, according to IDC.
CLICK HERE TO READ MORE ON FOX BUSINESS
Dell’s first-quarter profit rose sixfold to more than $880 million. Dell plans to spin off its ownership stake in VMware in late 2021.
Meanwhile, VMware’s first-quarter profit rose 10% to $425 million while its revenue rose 9.5% to $2.99 billion.
HP’s second-quarter profit rose 61% to $1.23 billion while its revenue rose to $15.88 billion from $12.47 billion a year earlier. The company now expects to generate full-year adjusted earnings per share of $3.40 to $3.50, or 25 cents above the prior projection.