Dell Stock- Mixed Earnings Results: Dell and HP Struggle with Investor Expectations
Dell Stock– Dell Technologies (DELL) reported better-than-expected earnings for its fiscal fourth quarter, but its sales figures fell short of Wall Street estimates. The company also missed analyst expectations with its guidance for the current quarter, causing a drop in Dell’s stock during after-hours trading.
For the quarter ending January 31, Dell posted adjusted earnings of $2.68 per share, surpassing analysts’ expectations of $2.52 per share. However, its revenue of $23.93 billion came in below the anticipated $24.57 billion. On a year-over-year basis, Dell saw a healthy 18% increase in earnings and a 7% rise in sales.
The company’s growth in its Infrastructure Solutions Group revenue by 22% helped offset some challenges, with Chief Operating Officer Jeff Clarke stating, “In Q4, we grew our Infrastructure Solutions Group revenue by 22%, and we’re well-positioned to capture growth across every segment of our business.”
Dell’s Q1 and Full-Year 2026 Outlook
Looking ahead to the current quarter (fiscal Q1), Dell forecasts adjusted earnings of $1.65 per share, a 25% year-over-year increase. However, this is below the analyst consensus of $1.78 per share. Additionally, Dell expects sales of $23 billion, which represents a 3% increase year over year. Analysts had previously expected sales of $23.63 billion.
For its full fiscal year 2026, Dell expects adjusted earnings of $9.30 per share, which marks a 14% increase, and sales of $103 billion, an 8% increase. Wall Street analysts had expected earnings of $9.26 per share on sales of $103.4 billion.
Despite the lower-than-expected guidance for Q1, Dell remains optimistic about its future growth prospects. Clarke added, “Our prospects for AI are strong, as we extend AI from the largest cloud service providers, into the enterprise at scale, and out to the edge with the PC. The deals we’ve booked with xAI and others put our AI server backlog at roughly $9 billion as of today.”
Dividend and Share Repurchase Plans
Dell also made positive announcements regarding its shareholder returns. The company increased its annual cash dividend by 18% to $2.10 per share. The first quarterly dividend of 52.5 cents per share will be paid on May 2 to shareholders of record as of April 22. Additionally, the Dell board approved a $10 billion increase to its share repurchase authorization, which further highlights the company’s commitment to returning value to its shareholders.
Dell Stock Movement
In after-hours trading following the earnings report, Dell’s stock dropped more than 2% to $105.10. During the regular session, Dell stock fell 6.8%, closing at $107.83. Despite beating earnings estimates, the weaker-than-expected sales figures and cautious guidance contributed to the stock’s decline.
HP Q1 Earnings Miss, Stock Drops
In a similar development, HP (HPQ) also reported its quarterly results, showing weaker-than-expected earnings for the first quarter of its fiscal year, which ended on January 31.
HP posted adjusted earnings of 74 cents per share, which slightly missed the analyst forecast of 75 cents per share. The company’s revenue for the quarter was $13.5 billion, surpassing the consensus estimate of $13.39 billion. However, HP’s earnings saw a 9% decline year-over-year, while its sales grew by 2%.
HP’s CEO, Enrique Lores, remained positive about the results, stating, “We are pleased with our Q1 performance, achieving revenue growth for the third straight quarter and advancing our strategy to lead the future of work.” He also highlighted strong growth in the commercial sector, particularly in Personal Systems, and momentum in areas like AI-powered PCs.
HP’s Q2 Guidance and Full-Year Forecast
For the current quarter, HP guided to adjusted earnings of 80 cents per share, falling short of the consensus estimate of 86 cents. However, the company is forecasting adjusted earnings of $3.60 per share for the full fiscal year, slightly above the consensus estimate of $3.57 per share.
In after-hours trading, HP’s stock fell more than 3% to $31.95, following the weaker-than-expected earnings report and cautious outlook for the next quarter.
Key Takeaways from Dell and HP’s Earnings Reports
Dell and HP’s reports reflect mixed signals from the tech industry, with both companies posting stronger-than-expected earnings but weaker-than-expected revenue and cautious guidance. Dell’s growth prospects in AI and its infrastructure solutions segment remain strong, but the company faces headwinds in the short term, as reflected in its lowered Q1 guidance.
Both companies’ stock price movements indicate that Wall Street is focused on forward guidance and the outlook for the remainder of the year. While Dell’s strong performance in AI and infrastructure is a positive sign, its cautious approach to the upcoming quarter has raised concerns among investors. Similarly, HP’s emphasis on its commercial business and AI growth is encouraging, but its guidance for Q2 and the full year could be a concern for investors looking for more immediate returns.
In conclusion, while Dell and HP are making strides in their respective sectors, their earnings reports highlight the ongoing challenges tech companies face in a volatile market. Investors will need to closely monitor these companies’ ability to meet their forecasts and whether their growth initiatives, such as AI development, will yield sustainable returns in the future.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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