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What's in Store for Dell Technologies (DELL) in Q4 Earnings?

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Dell Technologies (DELL - Free Report) is set to release fourth-quarter fiscal 2021 results on Feb 25.

The company expects fourth-quarter revenues to increase in the 3-4% range sequentially.

The Zacks Consensus Estimate for revenues is pegged at $23.99 billion, suggesting a 0.2% decline from the year-ago reported number.

Further, the consensus mark for quarterly earnings has been steady over the past 30 days at $2.17 per share, suggesting growth of 8.5% from the year-ago period’s reported figure.

Dell’s earnings beat the Zacks Consensus Estimate in three of the past four quarters, in-line with the same in one, the average earnings surprise being 27.3%.

Dell Technologies Inc. Price and EPS Surprise


Dell Technologies Inc. Price and EPS Surprise

Dell Technologies Inc. price-eps-surprise | Dell Technologies Inc. Quote


Let’s see how things have shaped up prior to this announcement.

Factors to Watch

Dell is expected to have benefited from its dominant position in the enterprise IT-solutions market despite sluggish enterprise spending due to coronavirus-induced macroeconomic woes.

Markedly, the work-and-learn-from-home necessity has stoked demand for cloud services. Furthermore, the coronavirus-led surge in usage of online and e-commerce services globally has compelled data-center operators to enhance their capacities to accommodate the demand spike for cloud services. This is expected to have benefited Dell in the to-be-reported quarter.

Moreover, the fourth-quarter top line is expected to reflect Dell’s share gain in the PC market amid solid demand for commercial PCs driven by coronavirus-led remote-working and online-learning wave. Dell was ranked third by both Gartner and IDC among all PC vendors in their latest fourth-quarter report, trailing Lenovo and HP (HPQ - Free Report) . (Read More: Pandemic Giving PC Demand a Boost: 4 Stocks to Watch)

However, the overall server market weakness is expected to have hurt Dell’s top line in the to-be-reported quarter. Moreover, this Zacks Rank #4 (Sell) company’s top-line growth is expected to have suffered from sluggish on-premise hardware spending as both enterprises and small-medium businesses’ customers delayed or scrapped projects. Additionally, weak demand for hyperscale servers also affected growth.

Moreover, Dell faces stiff competition in the server market from Hewlett Packard Enterprise (HPE - Free Report) and International Business Machines (IBM - Free Report) , which might have a bearing on the impending quarterly results.

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