Published - March 03, 2023 @ 3:11 PM (EET)
After delivering a disappointing fiscal first-quarter outlook that stoked fears of a prolonged downturn in demand for office equipment and home computers, Dell Technologies Inc. (NYSE:DELL) ticked lower during Thursday's evening trade.
On an earnings call Thursday, Chief finance officer Tom Sweet said revenue would decrease about 19% sequentially, implying revenue of $20.75 billion, falling shy of consensus at $21.6 billion.
Dell, whose revenue comes primarily from PC sales, has seen demand decline from pandemic highs in its enterprise and consumer businesses. Still, a robust server and storage demand has somewhat offset that.
The company's infrastructure solutions group has witnessed revenue climbing 7% to $9.9 billion in the fourth quarter that ended February 3. Meanwhile, the commercial and consumer units' revenue was down 17% and 40%, respectively.
Net revenue of $25 billion in the quarter decreased by 11%, said the Texas-based company in a statement, a smaller decline than the 16% analysts expected. Profit, excluding some items, came in at $1.80 per share.
Dell also announced that its long-serving finance chief Tom Sweet would retire after 26 years as of August 4 and named Yvonne McGill, who is currently corporate controller, his successor. Mr. Sweet's exit is in addition to Dell's announcement that it is cutting about 5% of its workforce, or roughly 6,650 jobs.
WHY IT MATTERS
Earlier this week, rival HP Inc. (NYSE:HPQ) reported a revenue decline of nearly 19% for the quarter that ended January 31. Revenue in the company's personal systems unit was down 24% from a year earlier to $9.2 billion.
In remarks tied to the earnings report for its fiscal fourth quarter, co-chief operating officer Chuck Whitten of Dell said, "the broad caution in the [information technology] spending environment that we started calling out in Q2 persists as customers continue to scrutinize every dollar in the current macro environment."
As the company plans to control what it can and invest for the long term, he said, adding, "we've positioned the business to navigate the current uncertainty and for the inevitable rebound."
Bringing the total for 2022 to $2.8 billion, Dell bought back $260 million of stock in the quarter and announced a 12% boost to its quarterly dividend, from 33 cents to 37 cents.
Dell stock was down 3% in after-hours trading at $38.95
