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Dell And HP Shares Drop 12% After Worse-Than-Expected Forecasts
DELLDell Technologies(DELL) Forbes·2024-11-27 19:12

Earnings Forecast and Stock Performance - Dell expects Q4 revenue between 24billionand24 billion and 25 billion, with adjusted earnings of 2.50pershare,belowanalystestimatesof2.50 per share, below analyst estimates of 25.5 billion and 2.65pershare[2]−HPprojectsQ1earningspersharebetween70centsand76cents,comparedtoanalystestimatesof85cents[3]−Dell′ssharesdroppedto2.65 per share [2] - HP projects Q1 earnings per share between 70 cents and 76 cents, compared to analyst estimates of 85 cents [3] - Dell's shares dropped to 124, marking the largest dip since a 17.8% decrease on May 30 [1] - HP's shares fell to just over 34,ontrackforitsworstlosssinceMarch2020whensharesdroppedover1434, on track for its worst loss since March 2020 when shares dropped over 14% in a single day [2] - Dell's shares had increased by 89.5% this year before Wednesday, while HP's shares had risen by more than 31% [5] AI Market and Business Performance - Dell's COO Jeff Clarke described the AI market as a "robust opportunity" with "no signs of slowing down," but noted that Dell's AI business "will not be linear" due to a "changing" market [3] - Dell reported 800 million in AI server sales and a 2.9billionorderbackloginMarch,contributingtoarecordhighstockprice[6]−HP′sCEOEnriqueLoressuggestedthecompanywouldbenefitfromthetransitiontoanupgradedWindowsoperatingsystem,thoughthetransitionhasbeenslowerthanexpectedandsaleshaveplateaued[6]FinancialResultsandValuation−DellreportedQ3earningsof2.9 billion order backlog in March, contributing to a record high stock price [6] - HP's CEO Enrique Lores suggested the company would benefit from the transition to an upgraded Windows operating system, though the transition has been slower than expected and sales have plateaued [6] Financial Results and Valuation - Dell reported Q3 earnings of 2.15 per share, beating analyst estimates of 2.06,andrevenueof2.06, and revenue of 24.4 billion, slightly below estimates of 24.67billion[4]−DellfounderandCEOMichaelDell′sfortunedecreasedbyapproximately24.67 billion [4] - Dell founder and CEO Michael Dell's fortune decreased by approximately 7.1 billion due to the drop in Dell's shares, leaving him with a net worth of $103.7 billion [7]