Dell Technologies Inc posted revenue that beat Wall Street estimates, powered by corporate and consumer spending on personal computers, which both reached company records in the fiscal third quarter.
Sales in the period ended
October 29 rise 21% to $28.4 billion, the Round Rock, Texas-based company said in a statement. That compares with analysts’ average estimate of $26.8 billion, according to data compiled by Bloomberg. Profit, excluding some items, was $2.37 a share. Analysts projected $2.23.
Dell and other PC makers have gotten a lift in the past year and a half from sales of equipment needed to support the pandemic-fueled surge in working and studying from home. In September, Dell said annual revenue would increase 3% to 4% through 2026. Researcher Gartner Inc last month reported that Dell’s PC shipments jumped more than 26% from July through September.
While component shortages have buffeted some computer manufacturers, founder and Chief Executive Officer Michael Dell recently said his company’s supply chain is “functioning well.” Along with many other makers of technology gear, Dell is also seeking to position the company as a seller of subscription-based services. Such offerings, including managing corporate networks and consulting on technology projects, provide recurring revenue streams and have wider profit margins than the sale of computer hardware.
The company’s shares rose about 4% in extended trading following the report. Dell stock, which closed at $54.67 in New York trading, has gained 47% so far this year.
Revenue from PCs rose 35% to $16.5 billion. Sales to consumers were up 21%, while PC sales to business and government agencies climbed 40% to $12.3 billion, the highest the company has ever reported, Dell said.
Revenue from the Infrastructure Solutions Group, which includes most of the company’s technology services, rose to $8.4 billion, a gain of 5% but slightly below the average analyst estimate of $8.46 billion. Server and networking sales rose 9% to $4.5 billion. Storage hardware revenue was $3.9 billion, up 1%.
Net income in the recent period rose to $3.89 billion from $881 million a year earlier, the company said.
Dell on November 1 completed the spinoff of its majority stake in VMware Inc., a maker of data-center software that Dell acquired in its 2016 acquisition of EMC Corp.