Dell's Quarterly Results Beat Estimates on Remote Work Boost

Dell’s product orders from the education sector jumped 24 percent in the second quarter.

By Reuters | Updated: 28 August 2020 12:24 IST

Dell's Quarterly Results Beat Estimates on Remote Work Boost

Dell saw an uptick in demand for its gaming systems, including Alienware

Highlights

Orders for Dell from the education sector jumped 24 percent
Government orders rose 16 percent in the second quarter ended July 31
Its software unit VMware has directly benefited from the shift to cloud

Dell on Thursday posted a smaller-than-expected drop in quarterly revenue and beat profit estimates on robust demand for its notebooks and software products for remote work and online learning.

Shares of the company were up two percent in trading after the bell.

The COVID-19 pandemic has led to a rapid shift to cloud, spurring demand for products that allow organizations to carry on, even as millions of people around the globe work from home to stay safe, and schools to hold virtual classes.

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Orders for Dell from the education sector jumped 24 percent in the second quarter ended July 31, and government orders rose 16 percent.

The company also saw an uptick in demand for its gaming systems, including Alienware as more people turned to gaming during stay-at-home orders.

Revenue from the company's biggest segment that includes desktop PCs, notebooks and tablets fell 4.6 percent to $11.20 billion (roughly Rs. 82,146 crores), and data center sales dropped 4.8 percent to $8.21 billion (roughly Rs. 60,206 crores) as companies directed their spending towards remote work, Dell said.

Its software unit VMware, which has directly benefited from the shift to cloud, posted a 9.7 percent rise in revenue to $2.91 billion (roughly Rs. 21,357 crores). Dell said in July it was planning to spin off its 81 percent stake in the unit.

The company's total revenue slid 2.7 percent to $22.73 billion (roughly Rs. 166,826 crores) from a year earlier, but edged past analysts' average estimate of $22.52 billion (roughly Rs. 165,285 crores), according to IBES data from Refinitiv.

Excluding items, Dell earned $1.92 (roughly Rs. 140) per share, beating estimates of $1.40 (roughly Rs. 103) per share.

Net income fell to about $1.10 billion (roughly Rs. 8,066 crores), or $1.37 (roughly Rs. 100) per share, from $4.23 billion (roughly Rs. 31,017 crores), or $4.47 (roughly Rs. 327) per share.

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