Dell Breaks Streak of Data Center Sales Declines

Ian King (Bloomberg) -- Dell Technologies Inc. reported quarterly revenue that topped analysts’ estimates bolstered by continued strong demand for personal computers needed for work and study from home.

Server and networking sales gained 3% to $4.4 billion from a year earlier, breaking a streak of seven consecutive quarters of year-over-year declines, while storage hardware revenue fell 2% to $4.4 billion.

Sales from VMware Inc., which is majority-owned by Dell, was $3.3 billion. The publicly traded company offers software for data centers. VMware Chief Executive Officer Pat Gelsinger left the company to become CEO of Intel Corp. earlier this month. Dell is considering plans to spin off VMware, but has said it won’t make a decision until after September 2021.

Overall sales rose 9% to $26.1 billion in the period that ended Jan. 29, the Round Rock, Texas-based company said Thursday in a statement. That compares with an average analyst estimate of $24.5 billion, according to data compiled by Bloomberg. Profit, excluding some items, was $2.70 a share. Analysts projected $2.14 a share.

Under Chief Executive Officer Michael Dell, the company is trying to reduce its dependence on one-time lower margin hardware sales and transform itself into a seller of subscription-based computer services. While that shift is ongoing, the company still gets about half of its revenue from sales of PCs to commercial and consumer customers.

Earlier, rival HP Inc. also reported quarterly sales that topped estimates on vigorous consumer demand for the company’s laptops and personal printers.

Dell shares closed at $79.72 in New York. The stock has increased about 9% this year.

Fiscal fourth-quarter revenue from consumer PCs jumped 19% to $3.8 billion, the company said. That compares with a 14% expansion in the prior period. PC sales to business and government agencies rose 16% to $9.9 billion.