Same motive, same punishment for HP Inc and Dell, whose prospects disappointed. The stock of the company specializing in personal computers and printers fell 12.99% to $34.02 and that of the IT group fell 12.02% to $124.70. HP Inc is penalized by the weakness of the PC market for the general public. Regarding Dell, the $2.9 billion in revenue generated by AI-optimized servers is lower than the optimistic expectations of investors and the “sell-side”, also underlines the Swiss bank, UBS.
In the fourth quarter, ended at the end of October, HP Inc generated net profit down 7% to $906 million, or 93 cents per share. Excluding one-off items, profit also reached 93 cents per share, in line with expectations. Its turnover increased by 1.7% to $14.06 billion while the market was targeting $13.99 billion.
For the first quarter, the group is targeting adjusted earnings per share of between 70 and 76 cents while the market is targeting 82 cents per share. For the financial year, HP Inc expects adjusted EPS of between $3.45 and $3.75, compared to market expectations of $3.59.
Dell: AI is not enough
In the third quarter, which ended in early November, Dell saw its net income increase 12% to $1.13 billion, or $1.58 per share. Adjusted for exceptional items, earnings per share came to $2.15, where the market was targeting only $2.05. Revenues rose 10% to $24.37 billion, coming in below expectations: $24.59 billion.
They were supported by its ISG division housing the server business, whose revenue jumped 34% to $11.2 billion. It benefits from the boom in artificial intelligence.
The IT group expects revenues of between $24 billion and $25 billion for the current quarter, compared to Wall Street's forecast of $25.40 billion. The ISG division is expected to grow by around 25%. Adjusted earnings per share are forecast between $2.40 and $2.60, or $2.50 on average, while analysts are targeting $2.66.
source: AOF
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