Dell Tech reported on Tuesday third-quarter earnings that beat analysts’ forecasts and revenue that topped expectations.
Financial Highlights :
Dell Tech announced revenue of $28.39B compared to the prior corresponding quarter on revenue of $27.37B. Up 21%, driven by growth in all business units, customer segments and geographies, as well as broad strength across commercial PCs, servers and storage
Operating income was a third-quarter record of $1.3 billion, a 19% increase over the same period the prior year, and non-GAAP operating income was a third-quarter record of $2.9 billion, up 5%.
Net income was $3.9 billion, non-GAAP net income was $2.0 billion and adjusted EBITDA was $3.4 billion.
Net cash from operating activities was $3.3 billion.
Diluted earnings per share were $4.87, up 351% and non-GAAP diluted earnings per share were $2.37, up 17%.
Dell Tech shares are down 25.41% from the beginning of the year and are trading at $55.41, down-from-52-week-high. They are under-performing the EUR/USD which is down 0% year to date.
Dell Tech shares gained 1.35% in after-hours trade the report.
Dell Tech follows other major Information Technology sector earnings this month.
This quarterly report represents an earnings surprise of 1.72%. A quarter ago, it was expected that this computer and technology services provider would post earnings of $2.05 per share when it actually produced earnings of $2.24, delivering a surprise of 9.27%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Revenue at Dell’s client solutions business, home to its hardware devices, rose 35% in the quarter on booming demand from companies upgrading their computer systems to meet work-from-home challenges.
Revenue from its infrastructure solutions group, which includes the data center business, was up 5% at $8.4 billion in the quarter.
Dell Technologies ended the quarter with remaining performance obligations of $47 billion, up 26%, deferred revenue of $31 billion, and cash and investments of $24.2 billion. The company has paid down a total of $15.9 billion of debt year-to-date and received an Investment Grade corporate family rating from all three of the major credit rating agencies.
The company’s net income surged more than four-fold to $3.89 billion, or $4.87 per share, in the third quarter ended Oct. 29, from $881 million, or $1.08 per share, a year earlier.
Financial Statement :
|
DELL TECHNOLOGIES INC. Condensed Consolidated Statements of Income and Related Financial Highlights (in millions, except percentages; unaudited) |
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|
Three Months Ended |
Nine Months Ended |
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|
October 29, |
October 30, |
Change |
October 29, |
October 30, |
Change |
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|
Net revenue: |
|||||||||||||||||||
|
Products |
$ |
21,540 |
$ |
17,352 |
24% |
$ |
58,968 |
$ |
50,127 |
18% |
|||||||||
|
Services |
6,854 |
6,130 |
12% |
20,035 |
17,985 |
11% |
|||||||||||||
|
Total net revenue |
28,394 |
23,482 |
21% |
79,003 |
68,112 |
16% |
|||||||||||||
|
Cost of net revenue: |
|||||||||||||||||||
|
Products |
17,552 |
13,789 |
27% |
47,137 |
39,923 |
18% |
|||||||||||||
|
Services |
2,783 |
2,432 |
14% |
8,164 |
6,919 |
18% |
|||||||||||||
|
The total cost of net revenue |
20,335 |
16,221 |
25% |
55,301 |
46,842 |
18% |
|||||||||||||
|
Gross margin |
8,059 |
7,261 |
11% |
23,702 |
21,270 |
11% |
|||||||||||||
|
Operating expenses: |
|||||||||||||||||||
|
Selling, general, and administrative |
5,293 |
4,772 |
11% |
15,398 |
14,419 |
7% |
|||||||||||||
|
Research and development |
1,417 |
1,360 |
4% |
4,208 |
3,884 |
8% |
|||||||||||||
|
Total operating expenses |
6,710 |
6,132 |
9% |
19,606 |
18,303 |
7% |
|||||||||||||
|
Operating income |
1,349 |
1,129 |
19% |
4,096 |
2,967 |
38% |
|||||||||||||
|
Interest and other, net |
3,436 |
273 |
NM |
2,689 |
(929) |
389% |
|||||||||||||
|
Income before income taxes |
4,785 |
1,402 |
241% |
6,785 |
2,038 |
233% |
|||||||||||||
|
Income tax expense (benefit) |
897 |
521 |
72% |
1,079 |
(124) |
970% |
|||||||||||||
|
Net income |
3,888 |
881 |
341% |
5,706 |
2,162 |
164% |
|||||||||||||
|
Less: Net income attributable to non-controlling interests |
45 |
49 |
(8)% |
145 |
139 |
4% |
|||||||||||||
|
Net income attributable to Dell Technologies Inc. |
$ |
3,843 |
$ |
832 |
362% |
$ |
5,561 |
$ |
2,023 |
175% |
|||||||||
|
Percentage of Total Net Revenue: |
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|
Gross margin |
28 |
% |
31 |
% |
30 |
% |
31 |
% |
|||||||||||
|
Selling, general, and administrative |
19 |
% |
20 |
% |
19 |
% |
21 |
% |
|||||||||||
|
Research and development |
5 |
% |
6 |
% |
5 |
% |
6 |
% |
|||||||||||
|
Operating expenses |
24 |
% |
26 |
% |
25 |
% |
27 |
% |
|||||||||||
|
Operating income |
5 |
% |
5 |
% |
5 |
% |
4 |
% |
|||||||||||
|
Income before income taxes |
17 |
% |
6 |
% |
9 |
% |
3 |
% |
|||||||||||
|
Net income |
14 |
% |
4 |
% |
7 |
% |
3 |
% |
|||||||||||
|
Income tax rate |
18.7 |
% |
37.2 |
% |
15.9 |
% |
-6.1 |
% |
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