Dell Technologies Exceeded Analysts’ Expectations In Its First Fiscal Quarter, Posting Record Revenue As Demand Remains Strong For Remote Work Products, Including Personal Computers And Software
For the three months ending April 30, the Round Rock-based tech giant reported revenue of $ 24.5 billion, 12% more than in the same quarter last year, when the company had reported sales of $ 21.9 billion. It exceeded industry analysts’ expectations by $ 23.4 billion.
Dell Technologies reported net income of $ 938 million, or $ 1.13 per share under GAAP or generally accepted accounting principles. Adjusted net income was $ 1.1 billion, or $ 2.13 per share, the company said. This topped analysts’ projections by $ 1.62 per share. Dell also reported a record first quarter operating profit of $ 1.4 billion, up 84% from the same quarter last year.
Founded in 1984 by Michael Dell, Dell Technologies is one of the largest private employers in the greater Austin area, with more than 10,000 workers in central Texas.
The company’s strong quarter comes on the heels of an explosive fiscal year 2021, when Dell reported revenue of $ 94.2 billion as the number of people working from home amid the pandemic have helped increase demand for the company’s products. At the time, the company predicted that demand for remote work products would continue to remain strong, even as people began to return to the office.
In a statement to investors Thursday, Jeff Clarke, chief operating officer and vice president of Dell, said customers are increasingly looking to Dell Technologies to “build their digital future.”
“There has been a substantial acceleration in digital transformation across the world and you can see it in our results with record first quarter revenue of $ 24.5 billion,” Clarke said. “Looking ahead, we see technology becoming increasingly central to the global economy and society. We are excited about the opportunities ahead and for the future fueled by the data we create.”
Tom Sweet, chief financial officer of Dell, said the quarter was led by the company’s three main business units.
“We continue to focus on strengthening our capital structure, modernizing our core infrastructure and IT operations, and continuing to grow in hybrid and private cloud, edge, telecommunications and (software) as that service, ”said Sweet.
Dell’s infrastructure solutions group, which includes servers, storage and networking products, achieved $ 7.9 billion in revenue, up 5% year-on-year. other. The company said customers have added IT investments with a focus on hybrid cloud solutions. Revenue from Dell’s servers and networks rose 9% to $ 4.1 billion. Storage revenue was flat at $ 3.8 billion.
“The digital transformation has been accelerated. Our world now operates on the data superhighways, and we experience all that technology makes possible – deeper and data-driven information, connectivity and even deeper human connection. Technology is no longer the IT department. It’s the whole organization, ”Clarke said.
Dell’s Customer Solutions Groups segment, which includes desktops, laptops and tablets, posted revenue of $ 13.3 billion, up 20% from same period last year. .
The company said it saw strong sales in its XPS and Alienware laptops, as well as growth in its commercial Latitude, Precision and Chromebooks systems.
The Dell VMware subsidiary also had an excellent quarter. The California-based cloud software company saw revenue rise 9% to $ 3 billion. The company said the increase in revenue was due to its entire product portfolio.
Dell, which owns 81% of VMware’s shares, last month announced plans to separate from the commercial segment in the fourth quarter of the 2021 schedule and create two stand-alone companies. The proposed deal would create two stand-alone companies that would continue to work together under a trade deal.
The tech giant also said it has paid off $ 2.5 billion in debt. It also revised its debt repayment plan, aiming to repay at least $ 16 billion during the fiscal year once it completes its split from VMWare.
Clarke said the company is optimistic about its future, but noted that the industry could see the effects of a global semiconductor shortage. The global chip shortage has caused delays for a range of products that rely on technology for completion, from cars to laptops.
“The pandemic has accelerated the adoption of the digital technology industry and, coupled with an improving global economy, with increased demand for everything, there is a general shortage of semiconductors,” he said. declared. “We are executing our strategy, while working in this environment, as you have seen us do before and as you expect from us.”