Dell’s revenue growth missed analysts’ expectations
Dell Technologies (DELL) reported its fiscal 2020 first-quarter earnings results (for the period that ended in April 2019) on May 30. The company’s stock fell 3.3% in after-hours trading on the day as its revenue came in below expectations due to soft demand from China.
The company registered revenue of $21.9 billion for the first quarter, a rise of only 3% YoY (year-over-year). The biggest drag was its Infrastructure Solutions Group, which includes its data storage and server equipment. Revenue in the segment fell 5% to $8.2 billion in the quarter.
The company’s Client Solutions Group, which houses its hardware division (including PCs), grew 6% YoY to $10.9 billion. The growth was driven by commercial sales, but sales to consumers were a drag. The global PC market has been struggling to grow in the past few years.
Dell posted a profit in the first quarter
The company swung to a profit during its first quarter. Dell posted a net income of $293 million. Excluding nonrecurring items, the company made $1.45 per share on an adjusted basis, much higher than the $1.19 per share Wall Street was expecting.
The company’s profits were boosted by a larger income tax benefit. Its gross margin for the quarter stood at 31%, an expansion from 27.5% in the previous year’s quarter.
Dell is bracing for the effects of the US-China trade war, which could affect its business to some extent. The company’s earnings were affected by soft demand in China during the first quarter.
Dell stock has risen 48.9% since the company returned to the public markets.