Dell Posts Record Q3 Results on Strong PC Demand

Shares of Dell Technologies (DELL) rose 1.4% in the extended trading session on Tuesday after the American multinational technology company reported strong third-quarter Fiscal Year 2022 results. Driven by solid demand, durable competitive advantages and strong execution, the quarter proved to be the best third quarter in Dell’s history.

Don't Miss Our Christmas Offers:

Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter

Results in Detail

The company reported adjusted earnings of $2.37 per share, which comfortably beat the consensus estimate of $2.09 per share and grew 17% from adjusted earnings of $2.03 per share reported in the same quarter last year.

Total net revenue of $28.39 billion grew 21% year-over-year and topped analysts’ expectations of $27.01 billion. Growth in all business units, customer segments and geographies, along with strong demand across commercial PCs, servers and storage, acted as tailwinds.

Adjusted EBITDA for the third quarter stood at $3.41 billion, up 6% year-over-year. (See Dell stock charts on TipRanks)

Segmental Data

Client Solutions Group recorded revenues of $16.5 billion, up 35% year-over-year. Markedly, the reported quarter reflected the highest year-over-year PC share gain in Dell’s history, with shipments rising 26.6%.

Additionally, revenues for Infrastructure Solutions Group came in at $8.4 billion, up 5% year-over-year, and reflected the third consecutive quarter of positive revenue growth on the back of accelerating IT investments.

Further, VMware revenue was recorded at $3.2 billion for the third quarter, up 10% year-over-year.

Guidance

For the fourth quarter, the company projects revenue to be in the range of $27 billion to $28 billion, representing year-over-year growth of 12% to 16%. Further, adjusted earnings are expected to be between $1.85 and $2.05 per share.

CFO Comments

The CFO of Dell, Tom Sweet, said, “We continue to deliver strong results, with more than $13 billion in cash flow from operations on a trailing-twelve-month basis. The digital trends are tailwinds for our business, and along with our strategy and financial flexibility, lead us to be optimistic about our long-term growth prospects.”

See Insiders’ Hot Stocks on TipRanks >>

Wall Street’s Take

Shares of Dell have exploded 95.7% over the past year and have a Strong Buy consensus rating based on 6 Buys and 2 Holds. The average Dell price target of $58.67 implies 7.32% upside potential.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Dell’s performance. According to the tool, the Dell website recorded a 22.05% monthly decline, year-over-year, in global visits in October.