Data storage and VMware revenues drive a decent quarter over at Dell
An ongoing industry shortage of Intel chips however could put a dampener on some business segments going forward.
Good storage and VMware business growth aided a decent third quarter for Dell Technolgies, with storage revenue up 7%, Client Solutions Group revenue up 5% and VMware business rising 11%
Dell Technologies (NYSE: DELL) said third quarter revenue was $22.8bn, up 2%, and the operating income was $836m compared to an operating loss of $356m for the same quarter last year. Net income was $552m, after a $895m loss last time.
“Dell Technologies is innovating and integrating solutions across its entire portfolio to create the technology infrastructure of the future for our customers,” said Jeff Clarke, vice chairman of Dell Technologies. “Our highly differentiated set of offerings enables us to continue to win in a consolidating industry.”
The company ended the quarter with a cash and investments balance of $9.4m after paying off around $1.1bn of gross debt in the quarter, mainly related to its mammoth acquisition of EMC. The company has paid down more than $18bn in gross debt over the three years since closing the EMC transaction.
“This quarter’s results were driven by the strength of our diverse model, with our storage, commercial client and VMware businesses performing very well,” said Tom Sweet, chief financial officer at Dell Technologies.
Consumer revenue was down 6% to $3.1bn and could be hit further as Dell admitted it may not be able to meet sales demand because of a lack of suitable Intel chips in the market, which is an ongoing problem for the industry as a whole. Other parts of the Dell group are also expected to be affected by the problem.
VMware revenue was $2.5bn for the third quarter, up 11%, and operating income was $717m.