Dell and HP pour cold water on slowdown talk

HP is a dominant presence in a number of technology markets, from PCs and printers to services and servers, and is a bellwether for spending in the sector. Its results on Thursday pointed to solid - if unremarkable - growth.

HP had reported preliminary results back on 6 August - when it also announced Hurd's stunning departure - so Thursday's numbers had not been expected to move its stock, which has fallen 12 per cent since Hurd resigned.

HP said earnings rose six per cent as expected, helped by strength in servers and personal computers.

Storage and server revenue rose 19 per cent, while PC revenue rose 17 per cent and sales in the printing group climbed five per cent. Lesjak did not point to any particular weakness in the market, other than in consumer notebooks.

"Europe has held up well and the printing group is skewing toward commercial versus consumer, which is a positive. They also showed solid progress in networking, which is a key segment we're watching in the battle against Cisco," said Morningstar analyst Michael Holt.

Dell's chief financial officer Brian Gladden said the corporate refresh cycle was proceeding as forecast, adding he expects component costs to start to come down in the fiscal third and fourth quarters.

Dell beat Wall Street's profit and revenue estimates, and said it expected a continued pick-up in demand for PCs from corporate customers. But the company's gross profit margin lagged Wall Street expectations and its shares fell in after-hours trading.

Dell said it expected demand for PCs among corporate customers to continue for the "next several" quarters. It said it expects "seasonal improvements" in the third quarter, thanks to sales to the federal government and business customers, with a resulting "pick-up in the low single digits."

"This is a pretty stretched-out cycle and we think it'll continue for several quarters," Gladden said in an interview with Reuters. For the fiscal second quarter, "commercial growth was really the key for us, servers, networking systems, storage, services. That was up about 43 per cent."