Dell Technologies Posts Upbeat Q2 Results; Shares Fall

Dell Technologies (DELL) reported its best-ever second-quarter results, topping both earnings and revenue estimates due to strong performances across all segments, driven by robust demand and execution.

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Despite the Q2 beat, shares of the multinational technology giant were down 1.6% in Thursday’s extended trading session.

Adjusted earnings of $2.24 per share increased 17% year-over-year and beat analysts’ expectations of $2.03 per share. The company reported earnings of $1.92 per share in the prior-year period.

Additionally, revenues jumped 15% year-over-year to $26.12 billion and exceeded consensus estimates of $25.5 billion. (See Dell Technologies stock charts on TipRanks)

Segment-wise, Client Solutions Group revenue increased 27% to $14.3 billion driven by robust growth in the commercial client business. Also, Infrastructure Solutions Group revenue grew 3% to $8.4 billion as customers sped up their IT investments in multi-cloud solutions.

Markedly, VMware, slated for completion of its announced spin-off in early November, reported revenues that jumped 8% to $3.1 billion. This was attributed to overall strength spanning its diverse product portfolio.

For Q3, Dell expects above-normal sequential growth and mid- to high-teen year-over-year growth.

Dell’s CFO Tom Sweet commented, “We are creating long-term value by taking share, pursuing high-value growth opportunities and profitably growing and modernizing our core business. For example, in the storage space, VxRail orders were up 34% and PowerStore continues to ramp up nicely.”

Prior to the earnings results, Morgan Stanley analyst Kathryn Huberty reiterated a Buy rating on the stock.

Huberty predicted second-quarter results to outperform expectations based on a visible recovery in demand for enterprise storage products and corporate PCs as an increasing number of workers return to offices.

Consensus among analysts is a Moderate Buy based on 5 Buys and 2 Holds. The average Dell Technologies price target of $110.80 implies 9.1% upside potential to current levels.

TipRanks data shows that financial blogger opinions are 92% Bullish on DELL, compared to a sector average of 71%.