Dell Technologies announced better-than-expected results for its fiscal first quarter ended April 30, driven by impressive personal computing growth.
For the quarter, Dell (abbreviated: DELL) reported revenue of $24.5 billion, up 12% from a year ago and ahead of the Street consensus of $23.4 billion. Product revenue was $18 billion, an increase of 12%; Service revenue was $6.5 billion, an increase of 10%.
Non-GAAP earnings of $2.13 per share Overtaking Street consensus at $1.61, according to GAAP, the company earned $1.13 per share. Operating income was $1.4 billion, an increase of 96%. Gross margin was flat year-over-year at 31%. $14.4 billion
“Digital transformation is happening rapidly all over the world. And you’ll see from our results,” said Jeff Clark, Dell’s chief operating officer. Said in a statement “Look forward We see technology becoming more and more central to the global economy and society. We are excited about the future opportunities and for the data-driven future we create.”
Dell’s Client Solutions Group, essentially the company’s PC business, reported revenues of $13.3 billion, up 20%. Group operating income of $1.1 billion, an increase of 84%. Consumer revenues increased 42. While commercial customer revenue rose 14%, Dell said orders for Alienware gaming notebooks rose 76 percent.
The company’s Infrastructure Solutions Group reported revenue of $7.9 billion, an increase of 5 percent. Server and network revenue was $4.1 billion, an increase of 9%, while storage revenue was $3.8 billion. which is stable compared to last year Operating income in the segment was $788 million, an increase of 8 percent.
(VMW) at $3 billion, in line with Street estimates.
Dell also said it now expects to pay at least $16 billion in debt in fiscal 2022, up from its original target of $14 billion. This was partially driven by an expected special dividend from VMware ahead of Dell’s plan to split its stake in the company to holders. VMware spin is expected to close in the fourth quarter.
In an interview with Barron’sDell CFO Tom Sweet said the company expects the demand environment to continue to be strong. But that revenue in the July quarter rose slightly below the historically normal 6% level.
He said restrictions on the supply of displays, memory, graphics chips and other components will slow growth from the PC business And he noted that the company would see higher year-on-year costs from reinstating some employee benefits that were suspended during the pandemic.
Sweet also said this quarter was likely to include a higher percentage of education-related PCs. which has a lower average selling price than the enterprise version He said operating income dollars would fall in low single digits compared to the April quarter.
In Thursday’s regular session, Dell shares were up partially at $99.70.
Up 0.1% in late-month trading, Dell cuts 0.3% to $99.40.
Write to Eric J. Savitz at email@example.com.