Dell sales top estimates in positive signal for PC market
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Dell sales top estimates in positive signal for PC market

Dell sales top estimates in positive signal for PC market

The shares rose about 4.5 per cent in extended trading after closing at $56.24 in New York

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Dell Technologies reported better-than-expected sales of personal computers and data centre hardware, fuelling hopes of a recovery in the market for corporate technology. The company also said demand for products that help businesses use artificial intelligence (AI) are a “long-term tailwind.”

Fiscal second-quarter revenue dropped 13 per cent to $22.9bn, the company said Thursday in a statement. That exceeded the $20.8bn average projection of analysts surveyed by Bloomberg. Profit, excluding some items, was $1.74 a share, beating the average estimate of $1.14.

The computer industry has had a difficult year, experiencing a sharp demand slowdown as the pandemic waned. Dell has responded to the changing market by restructuring its sales organisation and cutting roughly 6,650 jobs earlier this year. Dell’s co-chief operating officer Chuck Whitten resigned earlier this month.

Revenue in the computer division declined 16 per cent to $12.9bn from a year earlier, but the figure topped estimates, and the unit produced a better-than-expected sales performance with consumers and businesses.

The results painted a better picture for the market than that from HP on Tuesday. The competitor computer maker cut its full-year forecast, saying a demand rebound would take longer than previously expected.

Dell’s infrastructure business unit reported $8.5bn in sales in the period, which ended August 4, compared with the average estimate of $7.3bn. Servers and networking revenue declined 3 per cent to $4.27bn, topping analysts’ predictions.

One of the servers Dell says is optimised for generative AI performance has about $2bn in backlogged orders, chief operating officer Jeff Clarke said in a transcript prepared for a conference call after the results were released. In May, Dell announced a service in collaboration with Nvidia to help businesses run generative AI in on-premise data centres.

“AI is already showing it’s a long-term tailwind, with continued demand growth across our portfolio,” Clarke said in the statement.

The shares rose about 4.5 per cent in extended trading after closing at $56.24 in New York. The stock has gained 40 per cent this year.

Also read: Power Letters 2022: Mohammed Amin, SVP – MERAT, Dell Technologies

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