Dell revenue rises as PCs remain popular
23:33, 26 August 2021
Dell beat analyst estimates in its latest fiscal quarter as revenue jumped 15% year-over-year on strong personal computer sales.
The Round Rock, Tex.-based company said on Thursday (26 August) in its quarterly report that revenue increased to $26.1bn from $22.73bn.
“We've made it through the first half of the year... and in this incredibly unpredictable (COVID-19 pandemic) environment, we delivered our best second quarter ever,” said Dell’s vice-chairman and Co-COO Jeff Clarke on a conference call with analysts to discuss the earnings report.
“That’s because whether we are re-opening or re-closing (businesses), eating in restaurants or ordering out, returning to the office or staying at home, the one constant has been an unprecedented demand for technology.”
For accounting purposes, the latest quarter was Dell’s second of fiscal-year 2022.
Net income down, operating income up
Dell saw its net income fall 20% year-over-year to $880m from $1.01bn a year earlier. But operating income jumped 21% to $1.37bn from $1.14bn from the year-earlier period. The hike was driven by a 27% year-over-year rise in client solutions group (CSG) revenue to $14.3bn from $11.2bn.
“There are positive secular trends at play in (CSG), especially in the areas we are most focussed — notably the commercial market, premium price bands and gaming — that should enable stable growth over the next few years,” said Clarke on the earnings call.
CSG operating income jumped 39% year-over-year to $995m.
Infrastructure solutions group (ISG) revenue climbed 3% year-over-year to $8.4bn from $8.2bn.
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Growth in servers and networking
Clarke said the ISG boost was primarily driven by growth in servers and networking as customers modernise their IT infrastructure to enable data-driven AI and machine-learning technologies.
“We were also encouraged by the strengthening of storage during the quarter and the overall demand for hyperconverged infrastructure and mid-range storage,” said Clarke.
Dell said it has paid down $5.5bn debt in this fiscal year, including the final $1bn of a margin loan. The company intends to pay down $16bn this fiscal year, with the majority of that amount coming when Dell completes spin-off of its VMware subsidiary. That deal is expected to close in November, both companies confirmed Thursday.
Co-COO Chuck Whitten said the spin-off of VMware will unlock the opportunity for Dell “to pursue a balanced capital-allocation strategy and invest in sustained, profitable growth for years to come,” he said.
Cash flow from operations soared 63% year-on-year to $12.8bn.
Dell released its earnings report after North American markets closed. Its share price was down 1.95% in after-hours trading in New York at $99.60.