PC Sales Fall More than Expected in Q4; Microsoft’s Windows 8 Failed to Move the Needle (MSFT, DELL, HPQ)

On Monday analysts from Digitimes and IDC reported than PC shipments fell -6.4% in the fourth-quarter. These underwhelming numbers come in as Microsoft’s (MSFT) Windows 8 has failed to drive consumers to purchase new PCs.

The -6.4% drop in PC shipments was worse than the expected -4.4% decline in shipments. This is the first time in over five years that the PC market has shown year-over-year decline in shipments.

PC sales in the US fell -4.5% in the fourth quarter and -7% in 2012.

Hewlett-Packard (HPQ) was the top shipper of PCs in the quarter, holding a 16.7% market share. The company moved 15.023 million units, a result that is about flat compared to last year. While HP is number one in market share, it still faces the struggles of being the top player in a declining industry.

Dell (DELL) came in at third in overall PC market share for the quarter, moving 9.482 million units.

The PC industry is hurting as an increasing number of consumers move away from purchasing desktop computers and move towards purchasing tablets and notebooks. More over, it has not helped PC manufacturers that the Microsoft’s Windows 8 platform has failed to draw consumers away from Apple and other competitors.

Hewlett-Packard shares were up 27 cents, or +1.67%, during premarket trading on Monday. Microsoft shares were up slightly while Dell shares were flat.

The Bottom Line
Shares of Microsoft (MSFT) have a 3.43% dividend yield, based on Friday’s closing stock price of $26.83. The stock has technical support in the $24 price area. If the shares can firm up, we see overhead resistance around the $26.83 price level. Shares of Hewlett-Packard (HPQ) have a 3.28% dividend yield, based on Friday’s closing stock price of $16.16. The stock has technical support in the $12-$14 price area. If the shares can firm up, we see overhead resistance around the $18 price level. Shares of Dell Computer (DELL) have a 2.94% dividend yield, based on Friday’s closing stock price of $10.88. The stock has technical support in the $9 price area. If the shares can firm up, we see overhead resistance around the $12 price level.

Hewlett-Packard (HPQ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 2.8 out of 5 stars. Dell (DELL) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars. Microsoft (MSFT) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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