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Dell boosted revenue in the last quarter, but shortages of components will not allow to satisfy demand for PCs until the middle of the year

Dell’s quarterly revenue rose 16% to $27.9 billion, beating analysts’ expectations, but the company’s guidance for the current quarter dampened investor sentiment, sending the company’s stock down 12%. According to Dell’s management, it will not be possible to overcome the deficit in the current half of the year, and this will negatively affect profits.

Dell’s PC revenue grew 26% to $17.3 billion, infrastructure solutions brought in 3.4% more year-on-year ($9.22 billion), and server and network solutions grew $4.7 billion (+7%). Dell’s earnings per share did not exceed $1.72 last quarter due to higher tax deductions after the deal with the VMware division, although investors expected the level of $1.94 per share. This was also the reason for the depreciation of Dell’s stock after the publication of quarterly reports. In the current quarter, the company expects to earn earnings per share in the range of $1.25 to $1.50. This is also below the market’s expectations of $1.52 per share.

Gartner estimates that Dell PC shipments rose 7.9% in the fourth quarter, while the overall market saw a 5% decline. Last quarter, the computer vendor was able to bring its backlog back to the upper end of the normal range, but that number will rise again this quarter, according to Dell. The shortage of components will be to blame for everything, since it will not be possible to defeat it until the middle of the year, at least – especially in the segment of servers and network equipment. In the coming quarter, Dell expects to gain $25.7 billion, which is higher than analysts’ expectations, corresponding to the level of $24.5 billion.



source: Bloomberg




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