Dell Technologies who were slammed recently by one of Australia’s top reviewers of notebooks has seen their shares fell sharply after the US PC maker delivered a slump in revenues.
Consumer revenue fell 18% to US$2B as the Company struggled to deliver new cutting-edge notebooks.
Dell stock was down more than 11% in after-hours trading following the report having fallen 24.9% during the past six months.
Revenue was hurt by a performance in the company’s client solutions group, which includes PCs and laptops, saw revenue fall 1% to $12.1B year-on-year in
Looking ahead to the fourth quarter, Dell forecast revenue between $24 billion and $25 billion, missing the average analyst projection of $25.57 billion, according to LSEG data.
Commenting on the report, Deutsche Bank analysts believe Dell’s weaker Q4 guide comes mainly due to delays in AI server sales and PC refresh activity.
Nick Ross a leading reviewer of PC’s the owner of ‘High Performance Laptops web site, recently called for a boycott of Dell and Alienware claiming that the Companies actions “Almost killed him.”
His comments kicked off a debate about how PR Companies are paid to milk exposure from tech writers and tech media sites in an effort to get a favourable review or story without any contribution “or very little” contribution to the originators of the content.
And when they don’t like a story, or a negative review believe that ‘black banning” a media organisation’ actually works when in reality the pen is mightier than the sword as Dell is finding out after Ross called for a boycott of the big PC brand.
The slump in Dell stock and the fall in consumer PC revenue follows the exit of Dells Alienware range from JB Hi Fi.
Both Dell Technologies and HP are forecasting lower-than-expected earnings for the current quarter, due in part to lack of demand for AI notebooks which are being sold at a premium price.
The shares of both companies have fallen on average 12%, while pacing what would be HP’s worst day in more than three years.
Yesterday HP’s shares dipped to just over $34, putting the stock on track for its worst loss since March 2020, when shares fell by more than 14% in a single day.
Dell—whose fourth quarter began Nov. 2—expects revenue to fall between $24 billion and $25 billion with adjusted earnings of $2.50 per share, below the $25.5 billion in revenue and $2.65 per share in earnings projected by analysts, according to FactSet.
Meanwhile, HP projected earnings per share to fall between 70 cents and 76 cents for a first quarter that started Nov. 1, compared to the 85 cents per share projected by analysts.
The AI market is a “robust opportunity” for Dell with “no signs of slowing down,” Jeff Clarke, Dell’s COO, said in the company’s report, though he noted on Wednesday that Dell’s AI business “will not be linear” as customers navigate a “changing” market.
HP personal systems, which includes personal computers which makes up the bulk of overall growth, saw net revenue rise 9% to US$11.5B year over year.
Printing net revenue rose 1% to $4.5B, while personal systems revenue rose 2% to $9.6B in Q4 year on year.
Bernstein analysts said HP’s guidance pointed “to an unusually back-half loaded year, which appears predicated on continued strong IPG margins and strong PC growth/upgrade cycle.”
“We don’t have high conviction in either and end up slightly below the midpoint of HPQ’s guidance range,” analysts led by Toni Sacconaghi commented.
Morgan Stanley (NYSE:MS) analysts voiced similar comments, noting that an in-line full-year guide and a sub-seasonal Q1 outlook “means 2025 will be more back-half loaded than ever before.”
