Dell Stock jumps on Q4 pace but falls on Outlook

Computer hardware giant Dell Technologies (DELL) beat Wall Street’s targets for its fourth fiscal quarter on Thursday night, thanks to strong sales of servers, storage and infrastructure equipment. However, Dell shares fell after the company presented a cautious outlook.


The Round Rock, Texas-based company earned $1.80 per adjusted share on sales of $25.04 billion in the quarter ended Feb. 3. Analysts polled by FactSet had expected Dell to earn $1.64 a share on sales of $23.42 billion. Year-over-year, Dell’s revenue increased 5% while sales decreased 11%.

Dell’s infrastructure solutions unit posted a 7% increase in sales to $9.9 billion in the fourth quarter. Storage systems revenue increased 10% to a record $5 billion. Server and network revenue increased 5% to $4.9 billion.

But Dell’s personal computer sales fell 23% year-over-year to $13.4 billion in the fourth quarter. Commercial PC sales fell 17% to $10.7 billion while consumer PC sales fell 40% to $2.7 billion.

Dell Stock pulls back on cautious outlook

In after-hours trading in the stock market today, Dell stock initially jumped on the quarterly pace. But it later fell after executives gave a muted preview of a conference call with analysts. In recent trades, Dell stock fell 3.2% to 38.90. During Thursday’s regular session, Dell stock fell 0.7% to close at 40.16.

“The high caution in the (IT) spending environment that we began calling out in the second quarter persists as customers continue to scrutinize every dollar in the current macro environment,” said Chuck Whitten, co-director of Dell’s operations, in a written statement. “We expect at least the first part of fiscal year 2024 to remain challenging.”

Coming out of its 2023 fiscal year, some industries continued to show growth like financial services, transportation, construction and real estate, Whitten said. But Dell is seeing weak demand in most other markets, he said.

“Underlying demand for PCs and servers remains weak and we are seeing signs of changing customer behavior around storage,” Whitten said. “While the fourth quarter was a very strong quarter for storage demand, we saw longer sales cycles and more cautious storage spending, as strength in very large customers was offset by declines in medium and small businesses. .”

Dell hopes to outperform the information technology industry by gaining market share this year, Whitten said.

Dell Stock ranks fourth in industry group

On Tuesday, industry peers HP (HPQ) provided mixed results for its fiscal first quarter ended Jan. 31. However, the PC and printer maker guided a rise in current quarter and full-year profits.

Dell stock ranks fourth out of 14 stocks in IBD’s computer hardware and peripherals industry group, according to IBD Stock Checkup. But it has an IBD composite rating of less than 44 out of 99.

Meanwhile, HP ranks seventh in the group with a composite rating of 37.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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