We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
DELL Q3 Earnings Top Estimates, Revenues Up on Strong PC Demand
Read MoreHide Full Article
Dell Technologies (DELL - Free Report) reported third-quarter fiscal 2022 non-GAAP earnings of $2.37 per share, beating the Zacks Consensus Estimate by 1.7% and increasing 17% year over year.
Revenues, on a non-GAAP basis, increased 21% year over year to $28.41 billion and beat the consensus mark by 3.8%.
Product revenues increased 24% year over year to $21.50 billion. Services revenues increased 12% year over year to $6.85 billion.
The upside can be attributed to 9% growth in servers and networking revenues that totaled $4.53 billion. Storage revenues inched up 1% year over year to $3.86 billion.
Client Solutions Group (“CSG”) revenues were $16.55 billion, up 35% year over year. Commercial revenues soared 40% year over year to $12.29 billion. Consumer revenues were up 21% to $4.25 billion.
In the consumer business, Dell Technologies witnessed strong growth in its high-value segments, including commercial PCs and high-end consumer gaming. Dell announced the launch of new Latitude Rugged notebooks. Dell also released the redesigned Alienware Aurora on the 25th anniversary of Alienware.
Dell Technologies was ranked third by Gartner and IDC among all PC vendors, trailing Lenovo and HP in their latest third-quarter report.
VMware revenues were $3.2 billion in the reported quarter, up 10% year over year, driven by portfolio strength. Operating income in the reported quarter was $837 million, unchanged year-over-year.
Operating Details
Non-GAAP gross profit increased 8% year over year to $8.41 billion. Gross margin contracted 300 basis points (bps) year over year to 33%.
Adjusted EBITDA increased 6% year over year to $3.41 billion. Adjusted EBITDA margin contracted 200 bps year over year to 12%.
Non-GAAP operating income was $2.87 billion, up 5% from the year-ago quarter’s levels. Operating margin contracted 200 bps year over year to 10%.
ISG’s operating income was up 1% year over year to reach $892 million. CSG’s operating income rallied 14% year over year to $1.15 billion.
VMware’s operating income remained unchanged year over year to $837 million.
Balance Sheet and Cash Flow
As of Oct 29, 2021, Dell had $22.41 billion in cash and cash equivalents.
Debt was $48 billion as of Oct 29, 2021. The company cleared $15.9 billion of debt year to date.
The core leverage ratio, as of the third quarter, is approximately 1.9 times as Dell continues to progress toward its long-term target of 1.5 times.
Cash flow from operations was $3.25 billion in the reported quarter.
Guidance
Dell Technologies expects fourth-quarter revenues in the range of $27-$28 billion, suggesting 12-16% growth on a year-over-year basis. The company expects the operating income rate to increase sequentially since the fourth quarter is a seasonally strong storage quarter.
For fourth-quarter, non-GAAP earnings is expected between $1.85 per share and $2.05 per share.
Zacks Rank & Upcoming Earnings to Watch
Dell Technologies carries a Zacks Rank #5 (Strong Sell).
Investors interested in the Computer & Technology sector are eagerly awaiting earnings releases from Hewlett Packard (HPE - Free Report) , Salesforce (CRM - Free Report) and Jabil (JBL - Free Report) .
Hewlett Packard is set to release fourth-quarter fiscal 2021 results on Nov 30. The Zacks Consensus Estimate for earnings is pegged at 49 cents per share, unchanged in the past 30 days. Hewlett Packard sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hewlett Packard’s shares have returned 26% year to date against the Zacks Computer-Integrated Systems industry’s decline of 1.4% and the Computer & Technology sector’s return of 25.5%.
salesforce, a Zacks Rank #2 (Buy) stock, is scheduled to release third-quarter fiscal 2022 results on Nov 30. The Zacks Consensus Estimate for earnings is at 92 cents per share, unchanged in the past 30 days.
salesforce’s shares have returned 28.9% year to date compared with the Zacks Computer-Software industry’s rise of 41.9%. CRM has outperformed the Computer & Technology sector’s return of 25.5% year to date.
Jabil is likely to release first-quarter fiscal 2022 results on Dec 16. The Zacks Consensus Estimate for earnings is at $1.80 per share, unchanged in the past 30 days.
Jabil’s shares have returned 43.9% year to date compared with the Zacks Electronics-Manufacturing Services industry’s rally of 31.9%. The stock has outperformed the Computer & Technology sector’s return of 25.5% year to date.
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
DELL Q3 Earnings Top Estimates, Revenues Up on Strong PC Demand
Dell Technologies (DELL - Free Report) reported third-quarter fiscal 2022 non-GAAP earnings of $2.37 per share, beating the Zacks Consensus Estimate by 1.7% and increasing 17% year over year.
Revenues, on a non-GAAP basis, increased 21% year over year to $28.41 billion and beat the consensus mark by 3.8%.
Product revenues increased 24% year over year to $21.50 billion. Services revenues increased 12% year over year to $6.85 billion.
Dell shares are down 22.1% year to date, underperforming the Zacks Computers – IT Services industry’s return of 5.3% and the Computer & Technology sector’s return of 25.5%.
Quarter in Detail
Infrastructure Solutions Group (“ISG”) revenues were up 5% year over year to $8.43 billion.
Dell Technologies Inc. Price, Consensus and EPS Surprise
Dell Technologies Inc. price-consensus-eps-surprise-chart | Dell Technologies Inc. Quote
The upside can be attributed to 9% growth in servers and networking revenues that totaled $4.53 billion. Storage revenues inched up 1% year over year to $3.86 billion.
Client Solutions Group (“CSG”) revenues were $16.55 billion, up 35% year over year. Commercial revenues soared 40% year over year to $12.29 billion. Consumer revenues were up 21% to $4.25 billion.
In the consumer business, Dell Technologies witnessed strong growth in its high-value segments, including commercial PCs and high-end consumer gaming. Dell announced the launch of new Latitude Rugged notebooks. Dell also released the redesigned Alienware Aurora on the 25th anniversary of Alienware.
Dell Technologies was ranked third by Gartner and IDC among all PC vendors, trailing Lenovo and HP in their latest third-quarter report.
VMware revenues were $3.2 billion in the reported quarter, up 10% year over year, driven by portfolio strength. Operating income in the reported quarter was $837 million, unchanged year-over-year.
Operating Details
Non-GAAP gross profit increased 8% year over year to $8.41 billion. Gross margin contracted 300 basis points (bps) year over year to 33%.
Adjusted EBITDA increased 6% year over year to $3.41 billion. Adjusted EBITDA margin contracted 200 bps year over year to 12%.
Non-GAAP operating income was $2.87 billion, up 5% from the year-ago quarter’s levels. Operating margin contracted 200 bps year over year to 10%.
ISG’s operating income was up 1% year over year to reach $892 million. CSG’s operating income rallied 14% year over year to $1.15 billion.
VMware’s operating income remained unchanged year over year to $837 million.
Balance Sheet and Cash Flow
As of Oct 29, 2021, Dell had $22.41 billion in cash and cash equivalents.
Debt was $48 billion as of Oct 29, 2021. The company cleared $15.9 billion of debt year to date.
The core leverage ratio, as of the third quarter, is approximately 1.9 times as Dell continues to progress toward its long-term target of 1.5 times.
Cash flow from operations was $3.25 billion in the reported quarter.
Guidance
Dell Technologies expects fourth-quarter revenues in the range of $27-$28 billion, suggesting 12-16% growth on a year-over-year basis. The company expects the operating income rate to increase sequentially since the fourth quarter is a seasonally strong storage quarter.
For fourth-quarter, non-GAAP earnings is expected between $1.85 per share and $2.05 per share.
Zacks Rank & Upcoming Earnings to Watch
Dell Technologies carries a Zacks Rank #5 (Strong Sell).
Investors interested in the Computer & Technology sector are eagerly awaiting earnings releases from Hewlett Packard (HPE - Free Report) , Salesforce (CRM - Free Report) and Jabil (JBL - Free Report) .
Hewlett Packard is set to release fourth-quarter fiscal 2021 results on Nov 30. The Zacks Consensus Estimate for earnings is pegged at 49 cents per share, unchanged in the past 30 days. Hewlett Packard sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hewlett Packard’s shares have returned 26% year to date against the Zacks Computer-Integrated Systems industry’s decline of 1.4% and the Computer & Technology sector’s return of 25.5%.
salesforce, a Zacks Rank #2 (Buy) stock, is scheduled to release third-quarter fiscal 2022 results on Nov 30. The Zacks Consensus Estimate for earnings is at 92 cents per share, unchanged in the past 30 days.
salesforce’s shares have returned 28.9% year to date compared with the Zacks Computer-Software industry’s rise of 41.9%. CRM has outperformed the Computer & Technology sector’s return of 25.5% year to date.
Jabil is likely to release first-quarter fiscal 2022 results on Dec 16. The Zacks Consensus Estimate for earnings is at $1.80 per share, unchanged in the past 30 days.
Jabil’s shares have returned 43.9% year to date compared with the Zacks Electronics-Manufacturing Services industry’s rally of 31.9%. The stock has outperformed the Computer & Technology sector’s return of 25.5% year to date.