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Feb 22, 2024

Dell Stock Jumps As Computer Giant Crushes Q2 Goals

Computer hardware giant Dell Technologies (DELL) late Thursday crushed Wall Street's estimates for its fiscal second quarter and gave a bullish outlook for the current period. Dell stock jumped in

Computer hardware giant Dell Technologies (DELL) late Thursday crushed Wall Street's estimates for its fiscal second quarter and gave a bullish outlook for the current period. Dell stock jumped in extended trading.

The Round Rock, Texas-based company earned an adjusted $1.74 a share on sales of $22.93 billion in the quarter ended Aug. 4. Analysts polled by FactSet had expected Dell earnings of $1.14 a share on sales of $20.86 billion. On a year-over-year basis, Dell earnings rose 4% while sales declined 13%.

"Our Q2 performance underscores the power of our model to generate cash in a sequential growth environment," Chief Financial Officer Yvonne McGill said in a news release. Dell's revenue grew 10% from its fiscal first quarter.

Dell's Infrastructure Solutions Group reported $8.5 billion in sales, down 11% year over year. The group sells servers, storage and networking gear. Meanwhile, the company's Client Solutions Group posted sales of $12.9 billion, down 16%. The division sells desktop and notebook PCs.

For the current quarter, Dell predicted adjusted earnings of $1.45 a share on sales of $23 billion. Analysts had called for earnings of $1.37 a share on sales of $21.7 billion in the fiscal third quarter.

For the full fiscal year, Dell now expects to earn an adjusted $6.30 a share on sales of $90.5 billion. Wall Street was looking for earnings of $5.56 a share on sales of $86.9 billion.

In after-hours trading on the stock market today, Dell stock surged 7.8% to 60.60. During the regular session Thursday, Dell stock advanced 1% to close at 56.24.

"We continue to focus on the most profitable segments of the market where we have a leading position," Chief Operating Officer Jeff Clarke said in the release.

The demand environment is improving and artificial intelligence "is already showing it's a long-term tailwind," Clarke said.

Earlier this week, Dell peers HP (HPQ) and Hewlett Packard Enterprise (HPE) reported quarterly results.

Personal computer and printer maker HP matched earnings expectations for its fiscal third quarter, but its sales were light. HP also guided lower for the current period.

Meanwhile, HPE edged above Wall Street's targets for its fiscal third quarter but gave a mixed outlook. HPE makes computer servers, networking equipment and data storage systems.

Dell ranks fifth out of 14 stocks in IBD's Computer-Hardware/Peripherals industry group, according to IBD Stock Checkup. Dell stock has an IBD Composite Rating of 79 out of 99.

Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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