HP, with its recurring streams of revenue from services and printing supplies, may be able to better insulate itself from a decline in sales, and analysts expect the company's recent purchase of technology services provider EDS to generate cost savings.

Analysts paint a different picture for Dell.

"Keep in mind that Dell has a much higher exposure to PCs than HP," said Shannon Cross of Cross Research. "HP is much more diversified. Now, that doesn't mean that HP is not exposed to consumer and corporate just like everybody else."

Investors will be looking for signs of whether Dell will cut prices to gain market share and how HP plans to further diversify.

Dell, based in Round Rock, Texas, is scheduled to release it earnings report on Nov 20, and HP, based in Palo Alto, Calif, is due to report results on Nov 24.

On Wednesday, bellwether chipmaker Intel Corp issued a revenue warning, feeding concerns about IT spending. Earlier in the week, Best Buy slashed its outlook, heightening worries about consumer demand.

After Intel's warning, Goldman Sachs and BMO Capital Markets both downgraded Dell.

Citigroup, Credit Suisse and Deutsche Bank now expect global computer sales to fall in 2009.

Forrester analyst Andrew Bartels said HP is better prepared for tough times, and that he expects the company to emulate IBM and push further into additional business areas.

"For Dell, in particular, it does not look good. For HP it's looking a bit better because at least they have a couple of other lines [of business]."

Dell has been restructuring to address decreased demand. In August, the company said it had cut 8,500 jobs out of a planned 8,900 headcount reduction.

BMO analyst Keith Bachman said in a note on Thursday that he sees no near-term catalysts for the company, calling the coming quarter a "prelude to more poor results" next year due to Dell's reliance on a weak PC market.

Shares of both companies have been beaten down this year, with HP's stock down more than 40 percent, and Dell shares off more than 60 percent. HP's year-ahead price to earnings ratio is around 8, while Dell's is around 7.

For its fiscal-fourth quarter, HP's earnings are expected to rise to $1 a share on revenue of $33.2 billion, boosted by the EDS acquisition, according to analysts polled by Reuters Estimates. On average, analysts expect Dell's fiscal third-quarter earnings to be 33 cents a share on revenue of $16.4 billion.

In its fourth quarter last year, HP earned 86 cents a share on revenue of $28.3 billion. Dell earned 34 cents a share on revenue of $15.6 billion in its year-ago third-quarter.

Bartels expects Dell to get aggressive on pricing and try to use the economic downturn to take market share from companies like Lenovo Group Ltd.

"I think what Dell is going to try to do is say, 'We want to be the top dog in a weak market."'

The PC market itself is changing. Both HP and Dell were slow to catch on to the year's hottest technology trend, low-cost, ultraportable "netbooks" at a time when Dell in particular has been sharpening its focus on consumers.

By: DocMemory
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