(AOF) – The Dell IT group presented much better results than expected and weaker prospects than anticipated. In the third quarter, ended at the end of October, Dell generated net income that jumped 317% to $1 billion, or $1.36 per share. Adjusted for exceptional items, earnings per share came to $1.88, where the market was targeting $1.46. Revenue fell 10% to $22.3 billion, falling short of expectations: $23 billion.
The group is suffering from the sluggish PC and storage markets.
These good results are accompanied by disappointing forecasts.
The IT group expects revenues of between $21.5 billion and $22.5 billion for the current quarter, compared to Wall Street’s forecast of $23.9 billion. Adjusted earnings per share are forecast between $1.60 and $1.80 while analysts are targeting an average of $1.81.
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New historic decline in computer sales
After having already suffered a sharp decline last year, the market is faced with demand which remains weak. Supply suffers from excess inventory, which impacts prices. According to IDC, PC sales fell by another 29% in the first quarter, falling to less than 57 million units. This is much less than the 59.2 million devices sold over the same period in 2019, before Covid. Demand is down for individuals and businesses, which have equipped themselves with the rise of teleworking. The continued rise in interest rates in the United States and Europe, and its impact on inflation, is also detrimental. Among market leaders, Lenovo, Dell and Asus posted volume declines of more than 30%. HP recorded sales down 24%. Apple faced the biggest drop, with sales collapsing by more than 40% year-on-year. The Californian group could suffer from its rather high-end positioning.