Round Rock, Texas

DELL Technologies Inc and HP Inc reported revenue and earnings that showed consumers and companies continue to buy personal computers (PCs) even as pandemic lockdowns ease in some parts of the world.

However, the strong results didn't help the stocks, which declined.

Round Rock, Texas-based Dell said fiscal first-quarter sales rose 12 per cent to US$24.5 billion, compared with analysts' average estimate of US$23.3 billion, according to data compiled by Bloomberg.

HP reported revenue in its fiscal second quarter jumped 27 per cent to US$15.9 billion, also topping estimates by US$1 billion. HP also raised its annual profit target.

Despite the positive numbers, some investors are betting that PC growth is peaking and won't accelerate further, said Cross Research analyst Shannon Cross. Dell shares fell about 3.6 per cent and HP dropped 8.5 per cent at 10.07am in New York.

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HP has experienced a surge in demand for laptops needed by people working and going to school remotely during the Covid-19 pandemic, and those sales are persisting, chief executive officer Enrique Lores said.

The drag on the company's performance is a continuing shortage of computer chips, which means HP can't match supply to the demand for its products, Mr Lores said. That situation will persist until the end of 2021.

Dell executives echoed the concern about chips, predicting component supply constraints will continue into next year. The company will price into its products the higher costs of memory chips and displays while watching the impact that may have on demand for computers, chief financial officer Tom Sweet said.

"These are things we're going to have to navigate through and they'll be with us for a while," he said in an interview. "In the long term we're very optimistic about this space. If the pandemic did anything, it accelerated customers thinking that they need to invest in technology."

Revenue in the second quarter typically increases about 6 per cent sequentially, but will likely fall short of that this year, he predicted.

HP's PC-related sales rose 27 per cent in the three-month period, which ended April 30. Dell reported a 20 per cent revenue increase at its laptop and desktop unit. Palo Alto, California-based HP said notebook sales surged 47 per cent from the same period a year earlier.

HP's printer business had suffered from weak demand in the lockdown as companies held off on purchases of gear not needed in empty offices.

But printing and supplies revenue rebounded strongly in the quarter, helped by more companies reopening their offices and stocking up again.

Margins were hurt by increasing costs, chief financial officer Marie Myers said. "We do expect revenue to be driven by available supply rather than demand. Components and logistics costs are headwinds."

While Dell chief executive officer Michael Dell is trying to reduce the reliance of his company on one-time hardware sales in favor of subscription-based computer services, PC purchases still generate about half of revenue.

Sales from consumer PCs rose 42 per cent to S$3.5 billion in the quarter, the company said. That compares with a 19 per cent expansion in the prior period. PC sales to business and government agencies were up 14 per cent to US$9.8 billion.

Server and networking sales rose 9 per cent to US$4.1 billion from a year earlier. Storage hardware revenue was US$3.8 billion. Services revenue rose 10 per cent in the quarter to US$6.45 billion. BLOOMBERG