With various cost-cutting efforts, HP Inc (NYSE: HPQ) succeeded to overcome yet another steep drops in PC sales as it delivered better than expected quarterly results. HP’s competitor, Dell Technologies Inc (NYSE: DELL) also crushed estimates with its latest quarter thanks to its cost management execution, but unlike HP, it wasn’t as optimistic with its guidance. Overall, this was a pleasant surprise from PC makers, as back in April, even the mighty Apple Inc (NASDAQ: AAPL) showed its Mac shipments tanked 40.5% during the first quarter of the year. As far as largest computer makers go, Apple saw the biggest decline, but everyone, including Asus and Lenovo saw drops in shipments and weakened demand.

HP’s Fiscal Second Quarter Highlights

For the quarter ended on April 30th, HP saw its revenue take a 22% YoY plunge as it amounted to $12.9 billion. However, despite the lighter revenue, net earnings amounted to $1.07 billion, or 80 cents a share, topping last year’s comparable quarter when they amounted to $1 billion, or 95 cents a share. When restructuring costs and other charges are taken aside, HP earned $1.07 a share, dropping from last year’s fiscal quarter when it made $1.10 a share. Meanwhile, Fact Set survey of analysts guided for net earnings of 49 cents per share on revenue of $7.3 billion.

HP’s Third Quarter Guidance

Revenue is expected in the range between $6.7 billion to $7.2 billion, at the lower end of Fact Set’s guidance with earnings in line with Fact Set’s estimate in the range between 44 cents and 48 cents a share.

Dell’s First Quarter Highlights And Guidance

For the quarter ended in April, Dell normalized its supply chain, lowering its operating expenses 6% to $3.57 billion. Revenue did drop 20% to $20.92 billion but still topped Refinitiv’s consensus of $20.27 billion. The consumer and enterprise PC business unit saw a 23% drop in revenue, while the infrastructure unit that houses servers, storage and networking hardware experienced an 18% drop in revenue. Adjusted earnings amounted to $1.31 per share, topping estimates of 86 cents. But, due to cautious IT spending, Dell guided for second quarter revenue in the range between $20.2 billion and $21.2 billion, which the highest point of the range being the midpoint of analyst expectations, according to Reuters.

AI Is Bringing A New Kind Of PCs

HP CEO Enrique Lores told CNBC that AI will radically change the fundamentals of the PC industry and therefore, HP. For one thing, AI will power PCs to analyze data in record time. Therefore, Lores expects the industry to be truly refreshed as the customer experience will be redefined by this utterly new architecture. These innovative AI-powered models are expected to hit the market as early as next year.  Even Apple has boarded software engineers to exploit the opportunities of generative AI. What is certain is that everyone agrees that AI is transforming the way people interact with technology and what technology can do but it seems even the mighty Apple is lagging on this front.

HP Recap

Amid an unfavorable macroeconomy, both computing giants showed an exemplary execution of cost-control strategies. But HP did not only protect the margins of both its PC and printing segment as it also raised its full year guidance, despite consumers being more cautious about their IT spending. HP showed that disciplined execution can make a powerful difference and even Wall Street is impressed how good it navigated through the economic storm. HP CEO expects PC sales to recover in the remaining half of the year and relies on AI to fuel its future growth as it will redefine what PCs can do.

According to the IDC report, PC manufacturers can expect a recovery as 2023 nears its close. Even Apple, whose share of the PC market shrank, is expected to benefit from the eagerly anticipated rebound.

DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.

Don't miss real-time alerts on your stocks - join Benzinga Pro for free! Try the tool that will help you invest smarter, faster, and better.

This article HP And Dell Pull Out A Beat Despite The PC Slump originally appeared on Benzinga.com

.

© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.