Dell, HP earnings: Business customers carry the quarters

Dell, HP earnings: Business customers carry the quarters

Summary: Corporate sales carry Dell's second quarter while consumer sales remain flat. HP also reports.

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As expected, Dell's second quarter was carried largely by sales to corporate customers as demand was on the rise worldwide for the company's enterprise offerings, including servers and networking systems, storage and services. (Statement)

And Hewlett-Packard, which pre-reported earnings on August 6 at the same time it announced the resignation of then-CEO Mark Hurd, made its official earnings announcement today - without any reference to Hurd. For its third quarter, HP reported earnings of $1.08 on sales of $30.7 billion. Wall Street had been expecting eps of $1.07 on revenue of $30.46 billion. (Statement)

HP's statement was all business, with a brief statement from CFO and Interim CEO Cathie Lesjak: "The broad-based strength of HP’s Q3 performance further demonstrates the power of our strategy and the discipline of our execution. We raised our full-year outlook and are continuing to build momentum in driving out costs, investing for profitable growth and capitalizing on HP’s competitive advantages in the marketplace.”

Enterprise Storage and Servers were the shining star with a reported total revenue of $4.4 billion, up 19 percent. That compares to services, which saw revenue increase by 1 percent to $8.6 billion.

Previous coverage: Is it Dell's time to shine vs. HP?

Separately, Dell, for its second quarter, reported net income of $629 million, or 32 cents per share, on sales of $15.53 billion, a 22 percent increase over the year ago quarter. Wall Street had been expecting eps of 30 cents per share on sales of $15.2 billion for its fiscal second quarter.

Large enterprise saw the greatest revenue growth across business segments, up 38 percent to $4.5 billion. Small and Medium Business revenue saw a 25 percent increase, to $3.5 billion. Consumer, by contrast, was flat at $2.9 million.

In a statement, Chairman and CEO Michael Dell said:

We continue to strengthen our portfolio of data center solutions at an aggressive pace with the addition of key IP, talent and technology. This quarter’s results are a strong reflection of the progress we’ve made, and we remain very focused on delivering the best possible solutions and services to meet our customers’ IT needs.

In a conference call with analysts, executives said that there's continued evidence that the demand and refresh cycles among corporate customers will remain strong. They said the adoption of Windows 7 among its "significantly large install base" is still small. They also noted that research firms point to significant migrations to Windows 7 to occur within the next six months and continue for 24 months.

Executives were also asked about the sluggish consumer market and how much of that may be due to anticipation over tablets. Specifically, could tablets hamper PC sales for the holiday season? Michael Dell didn't downplay the significance of tablets but said that next year, not this year, is when tablets might have more of an impact on other segments. He noted that there's a lot of excitement around Android and that Dell is "participating in that. There are lots of folks working on tablets and touch-type solutions."

Shares of Dell were down in regular trading, closing at $12.04. Shares of HP were down in regular trading, closing at $40.76. Both companies saw continued declines in after-hours trading.

Topics: Enterprise Software, Data Centers, Hardware, Storage

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4 comments
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  • RE: Dell earnings: Businesses are spending but consumer remains flat

    Reason why consumer sales are flat? Dell's dismall support to consumers. Like waiting around for a while until someone answers? Or getting these "rookie" support people who have to put you on hold every time they need to check on something or they don't know what they are doing?

    How about the way Dell plays around with their "sales". They advertize "savings" but on what? They had a coupon code offer. Wasn't much of a deal since it amount to $5 cheaper than their "savings" deal as the coupon code does not apply to systems with "savings".

    Still remember the time when I called up for support to replace a mouse [with the ball]. Support asked if it works in DOS. Cable in right and secured. after 5 minutes of the most rediculous questions for what costs them [if lucky] $5 for a mouse, I hung up.
    Gis Bun
  • RE: Dell earnings: Businesses are spending but consumer remains flat

    look look http://ta.gg/4or
    lincc240
  • RE: Dell earnings: Businesses are spending but consumer remains flat

    Probably something to do with the way they sold PCs they knew to be faulty, showing no concience towards consumers. THey have destroyed the trust of their customer base who will now be looking to other suppliers for their new PCs. Their main competitor has done the same and has also felt the backlash from very dissatisfied customers. The court cases should never come to court in these sort of cases but instead these major players should rectify the problems right away for their customers. Instead, they choose to go to court which really just says to the customer "We've got your money, here's a finger!" So now we walk away from this type of company and they can do the other with their finger, at least until they start to address customer complaints. Out here, we don't want to talk to some snot nosed kid who has no technical training or expertise, we want to talk to someone who can genuinely help, and we want local offices/service centres where we can bring faulty machines and get to speak to someone with the knowledge to do the repair and fault-finding. Instead of that, we get no local service, no tech trained personnel who can barely use a phone, and a 'pass the buck' mentality which infuriates already annoyed customers. In the quest for ever greater profits they trample over customer's rights and continually break the law re consumer sales. So they shouldn't be surprised when their consumer sales go flat!
    bill.andersen@...
  • Where Has Dell Gone? Perhaps Falcon-NW is the new Dell

    Years ago when I was a technician at the Nevada Test Site, I used HP & Tektronics test equipment and Compaq PCs. Back in those days you could pick up a Sams Photofact for most electronic gear and maintain your own stuff.<br><br>I naturally gravitated to Dell computers when Dell allowed its customers to customize their orders. I have since purchased many Dell desktops, laptops, and even a few servers.<br>The last couple of years has seen my favorite computer company fall off in several ways.<br><br>While I understand Dell has become a big supplier of corporate equipment, why does it still pretend to cater to individual PC users?<br><br>I cannot imagine any company with worse telephone etiquette, or merchandise order support. Once you get someone on the phone they are nice enough alright, it's just they have no clue.<br><br>Working with Cisco, Microsoft, and others, I've gotten used to having support calls go to somewhere in India. It's just that once the call is answered you will likely be transferred several times, hung-up on, and still no more information than when you started 90 minutes ago.<br><br>I currently have an order in for a high-end Alienware system with three monitors to use the ATI Eyefinity features.<br>This system has been cancelled on me by Dell because it had been delayed and no one at Dell could give me the build status of the system or even locate the system. So I reordered it. In the mean time I received the monitors I ordered to use with the system so I've got 3 monitors sitting here on the floor in unopened boxes waiting on a computer system. I started this order the first week of July, yesterday I received notification that this order would be delayed again. Now Dell is estimating the first week in September.<br><br>I'm talking $8,000 worth of computer system, monitors, and accessories.<br>Dell Inc. should spin off the consumer portion of its company and just focus on the corporate business. These people can't even let you give them money for computers advertised on their website. They can't even tell you the status of your order.<br><br>Dell is destined to Die the Death of a Thousand Cuts.<br><br>While I am very well aware having my business will not make Dell, and the loss of my business won't break Dell. But at some point how can a company continue as a consumer business that cannot deliver an $8k order for items openly advertised on their website. How many of these kinds of customers can any company afford to lose?<br><br>Oh well, HP-Voodoo appear to have thrown in the towel for gaming systems, Dell wont even let you give them money, ok, Falcon-NW is next in the batters box. If this doesnt work I guess Im back to building my own systems again<br><br>Can we Americans actually deliver anything on time as ordered anymore?
    tonyman262