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HP, Dell Results Show PC Market Hamstrung by Chip-Supply Woe

Bloomberg business news
WATCH: Manufacturers and shipping executives in Asia are warning that the global supply crunch will get worse before it gets better. (Source: Bloomberg)
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HP Inc. and Dell Technologies Inc., two of the biggest personal-computer makers, posted earnings reports that raised alarm about the impact of a persistent component shortage, even as demand for their products remains strong.

HP executives said they couldn’t meet all the PC orders they received in the July quarter, and expect production to be hurt by a dearth of some types of chips, shipping disruptions and the shutdown of some factories in Asia. Dell reported strong sales and profit that topped estimates in the period, and gave a bullish forecast -- but its upbeat report was overshadowed by concerns raised by rival HP. 

Shares of both companies declined Friday, following their quarterly earnings announcements late Thursday. HP’s stock was down about 3.5% as the market opened in New York while Dell slid 4.9%.

“We could have grown more if it wasn’t for the shortages of components,” HP Chief Executive Officer Enrique Lores said in an interview. He expects demand will continue to be strong, but said HP will be limited by the lack of parts for several more quarters. Third-quarter revenue fell short of projections, while profit topped estimates and is forecast to keep growing as the company raises PC prices.