Dell results beat on server, network demand; CFO to retire
Lifting of lockdowns in China, a key market as well a dominant supplier of electronics components, is being seen as a positive for PC makers.
March 2 (Reuters) - Dell Technologies Inc on Thursday beat estimates for quarterly revenue and profit on strong demand for servers and network equipment that more than offset declines in the core PC segment, sending its shares up nearly 6% in extended trading.
The PC-maker also said finance chief Tom Sweet, 63, would retire this year. Sweet, who took on the role in 2014, will be succeeded by company veteran Yvonne McGill, Dell said.
Rising borrowing costs and lower consumer spending have hit Dell's growth, as customers and businesses delay their system upgrades.
Total revenue fell 11% to $25.04 billion in the fourth quarter ended Feb. 3, but came above the Refinitiv consensus estimate of $23.39 billion drawn from 12 analysts.
But storage and server demand has remained a bright spot, thanks to the ongoing digitization by corporates and the shift to hybrid work.
Revenue in the company's infrastructure solutions group, which includes servers, storage devices and networking hardware, rose 7% in the quarter. Meanwhile, revenue from the commercial and consumer units, which indicate PC demand, was down 17% and 40%, respectively.
Lifting of lockdowns in China, a key market as well a dominant supplier of electronics components, is being seen as a positive for PC makers, and it will help them rein in costs amid a sobering economic outlook.
In early February, Dell said it will cut over 6,000 jobs to reduce costs and ride out the demand downturn wrought by high inflation and rising interest rates. The company took a related charge of $367 million in the fourth quarter.
Dell's net income from continuing operations stood at $606 million in the reported quarter, compared with a loss of $29 million a year earlier.
Excluding items, Dell earned $1.80 per share, beating estimates of $1.63 per share.
