Component shortages took the shine off HP's Q3 financial results this week, with earnings per share beating analyst predictions but revenues falling short.
Revenues from the PC division were flat at $10.4 billion, dragged down by poor desktop shipments, which fell 7%. This more than offset a modest 2% rise in notebook sales. Consumer sales rose slightly at 3%, while commercial revenue fell by 1%. The company reported $869 million in operating profit for this division.
Executives warned that ongoing supply chain shortages have been challenging. "We continue to ship as many products as we can while navigating a complex operational environment," said CEO Enrique Lores. "We are managing through component shortages, COVID-related factory lockdowns in Southeast Asia, and congested ports, and transportation disruptions."
Conversely, the company did well in printers, which saw an overall year-on-year revenue bump of 24% to $4.9 billion. A 29% spike in commercial shipments couldn't quite buoy an 8% decrease in consumer unit shipments, leading to an overall 4% drop in units shipped. Both subcategories saw revenue rises, with consumer sales up 15% and commercial sales rising 46%. Supplies revenues also rose 20%.
Gartner reported earlier this year that PC sales are booming as people continue adapting to remote working conditions.
HP, which announced the acquisition of remote software specialist Teradici in July, reported non-GAAP earnings per share of $1, up over 50% year on year from 49 cents. This beat analyst estimates of 84 cents for Q3 2021 but excluded 8 cents in costs, including restructuring, acquisitions and debt paydowns.
GAAP-reported revenues limped in at $15.3 billion. Although this was up 7% on last year's $14.3 billion, it failed to reach analyst forecasts of $15.91 billion for the quarter.
Dell announced its Q2 results, outpacing HP's PC performance, overall revenue, and earnings growth. Dell's client solutions division, which handles PCs, saw a 27% year-on-year rise in revenues to hit $14.3 billion — a record for the company. Operating income for the division reached $995 million, up 39% from last year. Commercial and consumer PC revenues rose.
Dell's overall revenue was up 15% to $26.1 billion, exceeding analyst forecasts of $25.5 billion, while operating income rose 21% to $1.4 billion. Non-GAAP EPS hit $2.24, up from last year's $1.92 and exceeding analyst forecasts of $2.03.
Dell's co-COO Jeff Clarke also noted challenges in supply chain shortages. "The execution of our supply chain team is, I think, quite impressive with record shipments for the quarter for PCs, record shipments for displays," he said. "But, the types of devices would be scalers, TCONs, microcontrollers, power ICs, driver ICs. Those types of devices are the ones that we see consistently challenged at different times."
