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HP and Dell Gain as Return-to-Office Sales Drive Earnings

HP and Dell shares both rise as strong return-to-office demand for PCs, printers and other equipment drives both companies' quarterly earnings and sales.

HP  (HPQ) - Get HP Inc. (HPQ) Report and Dell  (DELL) - Get Dell Technologies Inc Class C Report shares both rose Wednesday as strong return-to-office demand for PCs, printers and other computer essentials allowed both companies to post stronger-than-expected quarterly sales and earnings.

Palo Alto, Calif.-based HP said it earned $1.1 billion, or 94 cents an adjusted share, vs. $835 million, or 62 cents an adjusted share in the same period a year ago. Analysts polled by FactSet had been expecting earnings of 84 cents a share.

Revenue rose 9.3% to $16.7 billion, about $1.3 billion ahead of the Street consensus forecast of $15.4 billion. Operating margin ticked up 1.2 points on a non-GAAP basis to 8.1%.

Dell, meantime, reported adjusted earnings of $2.37 a share, comfortably beating consensus estimates of $2.09 a share and coming in 17% above adjusted earnings of $2.03 a share reported in the same quarter last year.

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Total net revenue of $28.39 billion grew 21% year-over-year and topped analysts’ expectations of $27.01 billion. Growth in all business units, customer segments and geographies, along with strong demand across commercial PCs, servers and storage, acted as tailwinds, Dell said. 

“As offices are reopening, companies are investing to improve the experience of their employees, and this continues to drive very strong PC demand,” HP CEO Enrique Lores told CNBC’s Jim Cramer on Tuesday.

For the fiscal 2022 first quarter, HP said it expects to see non-GAAP diluted per-share earnings of between 99 cents and $1.05. For the full fiscal year, HP said it expects to generate free cash flow of "...at least $4.5 billion."

For Dell, the company said it expects fourth-quarter revenue to be in the range of $27 billion to $28 billion, representing year-over-year growth of 12% to 16%, and adjusted earnings between $1.85 and $2.05 a share.