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Softcat, Dell and HP pointing to a decent 2020

In a flurry of results the indications are that 2020 is looking solid and the current drivers in the market will continue

It's results season at the moment with some of the big vendors and big channel players sharing details of their financial performance.

For the channel the signs remain positive, with 2020 expected to be positive, but in the details there are signs that the Windows 10 refresh is starting to wind down and Intel's CPU shortages are rumbling on.

 

Softcat

The firm is looking ahead to a solid 2020 fiscal year after indicating that its first quarter had gone well.

The channel player provided a brief update for the three months ended 31 October with revenue, gross and operating profits all up year-on-year.

Although the update lacked the details of the numbers investors will have been cheered by the comments from Softcat's CEO Graeme Watt about the prospects for the rest of its fiscal year.

"We've performed well during the first quarter of our new financial year. Customer numbers and gross profit per customer were both up on the prior period, and we again saw growth across all areas of technology and customer segments," he said.

"We also successfully opened our new office in Birmingham in September and are excited about the contribution it can make over the long term. While it is still early in our new financial year, I'm confident we will achieve the goals we have set ourselves for 2020," he added.

 

Dell

The comments made by Jeffrey Clarke, vice chairman, products and operations at Dell, to analysts after the firm shared its Q3 numbers will have attracted the attention of the channel.

The firm has enjoyed surfing the Windows 10 refresh wave in its client business and is taking steps to ensure it can maintain the business from many of those customers, even as the PC refresh starts to tail off.

"IDC is projecting a decline in post Windows 10 which will be a headwind to CSG in fiscal 2021 overall. In Q3 CSG delivered strong results across commercial. Going forward we remain focus on direct growth and optimizing our channel relationships. We have invested in our sales forces in both small and medium businesses and continue to accelerate growth there," he said.

he also provided an update on the Intel CPU shortages, which have plagued the industry over the course of this year, and was downbeat on the prospects of those problems easing anytime soon.

"Intel CPU shortages have worsened quarter-over-quarter the shortages are now impacting our commercial PC and premium consumer PC Q4 forecasted shipments," he said.

In terms of the numbers revenue for the third quarter was up by 1% to $22.9bn and net income came in at $552m, compared to a loss in the previous year of $895m. The share price dipped following the vendor's trimming of sales expectations for fiscal 2020, which are now coming in at $91.8bn to $92.5bn, compared to the expected $93.5bn.

HP

All the recent attention has been on the will-it-won't-it Xerox buying HP saga and the Q4 results were seen as potentially another opportunity for the firm's management to rebuff the approach.

In the end, Enrique Lores, president and CEO of HP, refused to talk about that and preferred to share his thoughts with analysts about the strength of its PC business, with the personal systems unit delivering a 5% increase in revenues year-on-year and a 48% climb in operating profit.

On the printing side the revenues for the three months ended 31 October were down by 5% and Lores said that the firm was addressing the issue.

"We continue to execute our strategy. In Q4, total revenue declined 5% in constant currency. As we had anticipated, supplies revenue remained soft. We’re executing against both the operational and strategic plans we laid out in prior quarters. And as we said into fiscal year 2020, we expect our new commercial organization will drive better global best practices and consistency in supplies execution," he said.

For the full year the firm delivered almost flat revenues, up 0.5% at $58.7bn, but that was enough to give Lores the chance to talk about a third straight year of growth.

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