(Reuters) – Dell Technologies, Inc topped the Street estimates for quarterly revenue on Thursday in the computer maker’s first earnings report since returning to the public markets and also forecast annual revenue above estimates, lifted by demand for servers and networking equipment.
FILE PICTURE: the Dell logo is seen in this illustration photo taken in Sarajevo, Bosnia and Herzegovina, 12 October 2015. REUTERS/dado Ruvic
Dell, one of the best players in the PC market, back to the public markets, on Dec. 28 after back bought interest rate is linked to the performance of software maker VMware, and the shares have risen by more than 22 percent.
Sales in the Infrastructure Solutions Group, which houses the servers and network equipment, rose 10 percent to $9.9 billion. Servers and networking revenue rose 14 percent to $ 5.3 billion.
Client Solutions Group segment revenues increased by 4 percent to $10.9 billion. The unit keeps the desktop pcs, notebooks and tablets, but also as a peripherals business.
With the exception of a number of items, Dell expects for the full year 2020 with a revenue between $93 billion and $96 billion, largely above analysts estimate of $94.11 billion, according to the IBES data of Refinitiv.
The expectations for annual adjusted earnings per share between $6.05 and $6.70 falls below Street estimates of $6.81.
Dell made no mention of the earnings per share for the year 2019 as a result of certain transactions.
Dell Chief Financial Officer Tom Sweet that the dynamic macro-economic environment, in an interview with Reuters and said: “I do not think that the full year 2020 will be as strong year-on-year revenue growth perspective, but I do think that we continue to improve the profitability in the course of the year.”
Excluding the impact of purchase accounting of $167 million, the company posted total sales of $ 24 billion, above estimates of $23.83 billion.
For the fourth quarter ended Feb. 1, net loss attributable to Dell jumped nearly three-fold to $299 million. The operating expenses increased 13.7 percent to $6.78 billion.
Competitor VMware Inc beat in the fourth quarter revenue and profit estimates on strong demand for the software to boost cloud computing-efficiency, sending the shares up 3 percent.
Forrester analyst Glenn O’donnell is bullish on both Dell and VMWare.
“The companies have more than their share of critics, but both are running and merciless in competitive markets. You don’t see AWS-like growth numbers, but anyone who suggests that this dinosaur is just wrong,” he said, referring to Amazon.com Inc Amazon Web Services (AWS).
HP Inc, on Wednesday reported quarterly revenue that fell short of estimates, due to weak demand in the printer, as in the personal systems of companies.
Reporting by Vibhuti Sharma in Bengaluru; Editing by Sriraj Kalluvila and Lisa Shumaker