Dell and HP Tumbled in the US After-hours Session on Weaker-than-expected Earnings Outlooks

 

On November 26, the personal computer (PC) maker giant Dell (NYSE: DELL) released its third quarter fiscal 2025 financial results in which its earnings per share (EPS) beat analysts' expectations but overall revenue fell short of expectations. It reported that third-quarter revenue was $24.4 billion, rising 10% year-over-year, less than the $24.67 billion expected by LSEG consensus. Its non-GAAP diluted EPS was $2.15, up 14% YoY, surpassing the estimated $2.06. The company expected fourth-quarter revenue to fall between $24 billion and $25 billion, below LSEG expectations of $25.57 billion, and adjusted EPS to be $2.50, below the estimate of $2.65 per share.

 

 

 

For future growth, Yvonne McGill, CFO of Dell, said at the earnings call that Dell would continue reinforcing its leadership and robust momentum in AI. Dell is doing well in AI sales. Jeff Clarke, vice chairman and COO of Dell, said in the third quarter, demand for AI server orders reached a record $3.6 billion with more than 50% pipeline growth.

 

On the same day, the another PC maker giant HP (NYSE: HPQ) announced its Fiscal 2024 Full Year and Fourth Quarter Results. Its fourth-quarter net revenue was $14.1 billion, up 1.7% year-over-year. The GAAP diluted net EPS was $0.93, above the previous projection of $0.74 to $0.84 per share. The company expected adjusted EPS for the first quarter of fiscal 2025 to be between $0.70 and $0.76, less than Wall Street's expectations of $0.85.

 

 

Like Dell, HP's weaker-than-expected future profit projection made its shares slump 7.54% during the after-hour trading of the US market on the same day.

 

Regarding the underperforming future earnings estimates, HP said that mass demand for tech products had fallen back from its peak. Demand for personal computers powered by AI continued to flatten at the moment.