(HPQ), Dell’s main rival in the PC market.
Dell shares were up 8.3% late at $60.88.
For the fiscal second quarter ended Aug. 4, Dell reported revenue of $22.9 billion, down 13% from a year ago, but up 10% sequentially, and beat the $2 billion consensus forecast of $20.9 billion. The company’s forecast was for revenue of $20.2 billion to $21.2 billion.
Dell earned $1.74 a share on an adjusted basis in the quarter, beating both its own forecast for $1.10 and the Wall Street consensus call of $1.14. According to generally accepted accounting principles, the company received 63 cents per share.
Cash flow from operations was $3.2 billion, with Street estimates calling for a loss of $465 million. Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, was $2.6 billion, beating consensus forecasts by $2 billion.
Client Solutions Group, Dell’s PC business quarter had revenue of $12.9 billion, down 16% from a year ago, but up 8% sequentially and up from $12.1 billion on the road. Both consumer and business PC revenues were above Street estimates.
The infrastructure solutions group, which includes servers and storage systems, had revenue of $8.5 billion, down 11 percent from a year ago, but up 11 percent from the previous quarter, and Road Communications topped $7.4 billion. The company had better-than-expected results in both storage and servers in the quarter.
The company said 20 percent of server orders in the first half of the fiscal year were related to machine and artificial intelligence applications.
Dell saw an improvement in the demand environment as the company moved through the quarter. The company has also benefited from low prices as its profitability has eased the shortage of parts.
Dell bought back about $250 million worth of stock during the quarter.
“With an improved demand environment and strong execution, we delivered exceptional Q2 results,” said Jeff Clark, Dell’s vice chairman and chief operating officer. We will continue to focus on the most profitable segments of the market where we have a leadership position.
In a call with investors, the company estimated fiscal third-quarter revenue of between $22.5 billion and $23.5 billion, above consensus calls for $21.7 billion and flat from the second quarter. Adjusted earnings are expected to be $1.45 a share, above Wall Street expectations of $1.37. The company expects revenue from both of its business units to be flat compared to the previous quarter.
For the full year, the company sees revenue of $89.5 billion to $91.5 billion, with a profit of $6.30 billion. That’s up from the previous Street deal of $86.9 billion in revenue and $5.56 billion in profit.
Write to Eric J. Savitz at [email protected]
