Prime Highlights:
- Dell beat earnings-per-share expectations in Q3 and reported solid net income growth.
- The company forecasts a strong fourth quarter, driven by high demand in its server and data center business.
Key Facts:
- Q3 revenue: $27.01 billion (slightly below estimates of $27.13 billion); EPS: $2.59 (beat $2.47 estimate).
- Full-year revenue guidance raised to $111.7 billion from $107 billion; Q4 expected sales: $31.5 billion.
Background:
Dell reported its fiscal third-quarter results on Tuesday, posting revenue of $27.01 billion, slightly below analyst expectations of $27.13 billion. However, the company exceeded earnings forecasts with an adjusted EPS of $2.59, compared with $2.47 predicted.
Net income for the quarter was $1.54 billion, or $2.28 per diluted share, up from $1.17 billion, or $1.64, in the same period last year.
The company’s data center division, known as Infrastructure Solutions Group, achieved $14.11 billion in sales, with servers and networking equipment up 37% year-over-year. Much of this growth came from strong server shipments, totaling $5.6 billion for the quarter. Storage equipment sales contributed $4 billion to the results.
Dell’s laptop and PC division, Client Solutions Group, recorded $12.48 billion in sales, a 3% increase from last year, though slightly below the $12.65 billion expected by analysts. Overall, PC sales declined 7% annually.
Looking ahead, Dell expects Q4 revenue of $31.5 billion, surpassing analyst estimates of $27.59 billion. The company also raised its full-year sales forecast to $111.7 billion from $107 billion, reflecting strong demand in its server and data center segments.
Dell spent $1.6 billion on share repurchases and dividends during the quarter. Following the results, Dell shares rose 5% in after-hours trading.
