<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Dell Technologies DELL reported first-quarter fiscal 2020 non-GAAP net income of $1.21 billion, up 2.5% year over year.
GAAP revenues increased 2.6% year over year to $21.91 billion. However, the figure came below the Zacks Consensus Estimate of $22.49 billion. The year-over-year increase was driven by double-digit growth in commercial and VMware revenues.
Dell Technologies Inc. Price, Consensus and EPS Surprise” data-reactid=”11″>Dell Technologies DELL reported first-quarter fiscal 2020 non-GAAP net income of $1.21 billion, up 2.5% year over year.
GAAP revenues increased 2.6% year over year to $21.91 billion. However, the figure came below the Zacks Consensus Estimate of $22.49 billion. The year-over-year increase was driven by double-digit growth in commercial and VMware revenues.
Dell Technologies Inc. Price, Consensus and EPS Surprise
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Dell Technologies Inc. price-consensus-eps-surprise-chart | Dell Technologies Inc. Quote
Quarter Details
Product revenues (76.5% of GAAP revenues) increased 0.5% year over year to $16.75 million. Service revenues (23.5% of GAAP revenues) increased 10% year over year to $5.15 million.
Segment wise, Infrastructure Solutions Group (ISG) (37.4% of total net revenues) revenues were down 5.4% year over year to $8.2 billion. This was due to a 9% decline in servers and networking revenues and 1% decline in storage revenues year over year. Notably, server revenues declined due to soft demand environment.
However, the company’s new “software-defined data center solutions and hyper converged infrastructure” is witnessing increasing adoption. Additionally, Dell introduced data protection offering PowerProtect X400 in the current quarter.
Client Solutions Group (CSG) (49.8% of total net revenues) revenues were $10.91 billion, up 6.2% year over year. While Commercial revenues grew 13% year over year to $8.31 billion, Consumer revenues were down 10% year over year to $2.6 billion.
Dell is witnessing increasing adoption for its commercial PCs and increased its market share by 220 basis points (bps) in calendar first quarter. Moreover, the company witnessed year-over-year worldwide PC share growth for the 25th successive quarter and increased its market share by 80 bps in the reported quarter.
VMware VMW revenues were $2.28 billion (10.4%) in the quarter, up 12.5% year over year due to strength from its diverse product portfolio. Notably, Dell has a majority stake in VMware. The company also owns stakes in Pivotal Software PVTL and SecureWorks.
Notably, under Dell’s expanded partnership with Microsoft MSFT, the company’s users can “extend their on-premise VMware Cloud environments to Azure.”
Revenues from other businesses, including Pivotal, Secureworks, RSA Security, Virtustream and Boomi increased 2.9% year over year to $596 million.
Dell noted that it is investing in innovating its solutions as IDC forecasts IT spend, excluding telecom, to be more than twice the GDP by 2022.
Operating Details
Non-GAAP gross profit increased 7.4% year over year to $7.43 billion. Gross margin increased 170 bps from the year-ago quarter to 33.8% due to decline in component costs.
Adjusted EBITDA increased 8% year over year to $2.57 billion and adjusted EBITDA margin increased 60 bps year over year to 11.7%.
Non-GAAP operating expenses increased 7.1% year over year to $5.24 billion due to continued investment in sales capacity. Moreover, operating expenses, as a percentage of revenues, increased 110 bps year over year to 23.8%.
CSG operating income increased 49% year over year to $793 million. VMware operating income almost remained flat year over year at $614 million. However, ISG operating income declined 10% year over year to $843 million.
Non-GAAP operating income was $2.19 billion, up 8.4% from the year-ago quarter. Operating margin increased 60 bps year over year to 10%.
Balance Sheet and Cash Flow
Dell had $9.1 billion in cash, cash equivalents at the end of the first quarter compared with $9.68 billion in the prior quarter.
Cash flow from operations was $682 million in the reported quarter compared with $1.6 billion in the year-ago quarter.
Dell currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Click here to see these breakthrough stocks now >>” data-reactid=”23″>Dell Technologies Inc. price-consensus-eps-surprise-chart | Dell Technologies Inc. Quote
Quarter Details
Product revenues (76.5% of GAAP revenues) increased 0.5% year over year to $16.75 million. Service revenues (23.5% of GAAP revenues) increased 10% year over year to $5.15 million.
Segment wise, Infrastructure Solutions Group (ISG) (37.4% of total net revenues) revenues were down 5.4% year over year to $8.2 billion. This was due to a 9% decline in servers and networking revenues and 1% decline in storage revenues year over year. Notably, server revenues declined due to soft demand environment.
However, the company’s new “software-defined data center solutions and hyper converged infrastructure” is witnessing increasing adoption. Additionally, Dell introduced data protection offering PowerProtect X400 in the current quarter.
Client Solutions Group (CSG) (49.8% of total net revenues) revenues were $10.91 billion, up 6.2% year over year. While Commercial revenues grew 13% year over year to $8.31 billion, Consumer revenues were down 10% year over year to $2.6 billion.
Dell is witnessing increasing adoption for its commercial PCs and increased its market share by 220 basis points (bps) in calendar first quarter. Moreover, the company witnessed year-over-year worldwide PC share growth for the 25th successive quarter and increased its market share by 80 bps in the reported quarter.
VMware VMW revenues were $2.28 billion (10.4%) in the quarter, up 12.5% year over year due to strength from its diverse product portfolio. Notably, Dell has a majority stake in VMware. The company also owns stakes in Pivotal Software PVTL and SecureWorks.
Notably, under Dell’s expanded partnership with Microsoft MSFT, the company’s users can “extend their on-premise VMware Cloud environments to Azure.”
Revenues from other businesses, including Pivotal, Secureworks, RSA Security, Virtustream and Boomi increased 2.9% year over year to $596 million.
Dell noted that it is investing in innovating its solutions as IDC forecasts IT spend, excluding telecom, to be more than twice the GDP by 2022.
Operating Details
Non-GAAP gross profit increased 7.4% year over year to $7.43 billion. Gross margin increased 170 bps from the year-ago quarter to 33.8% due to decline in component costs.
Adjusted EBITDA increased 8% year over year to $2.57 billion and adjusted EBITDA margin increased 60 bps year over year to 11.7%.
Non-GAAP operating expenses increased 7.1% year over year to $5.24 billion due to continued investment in sales capacity. Moreover, operating expenses, as a percentage of revenues, increased 110 bps year over year to 23.8%.
CSG operating income increased 49% year over year to $793 million. VMware operating income almost remained flat year over year at $614 million. However, ISG operating income declined 10% year over year to $843 million.
Non-GAAP operating income was $2.19 billion, up 8.4% from the year-ago quarter. Operating margin increased 60 bps year over year to 10%.
Balance Sheet and Cash Flow
Dell had $9.1 billion in cash, cash equivalents at the end of the first quarter compared with $9.68 billion in the prior quarter.
Cash flow from operations was $682 million in the reported quarter compared with $1.6 billion in the year-ago quarter.
Dell currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
This Could Be the Fastest Way to Grow Wealth in 2019
Research indicates one sector is poised to deliver a crop of the best-performing stocks you’ll find anywhere in the market. Breaking news in this space frequently creates quick double- and triple-digit profit opportunities.
These companies are changing the world – and owning their stocks could transform your portfolio in 2019 and beyond. Recent trades from this sector have generated +98%, +119% and +164% gains in as little as 1 month.
Click here to see these breakthrough stocks now >>
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Dell Technologies Inc. (DELL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
VMware, Inc. (VMW) : Free Stock Analysis Report
Pivotal Software, Inc. (PVTL) : Free Stock Analysis Report
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