Dell reports 11 percent drop in revenue in the fourth quarter of 2022 after cutting more than 6,000 jobs
Dell Technologies reported a smaller-than-expected drop in quarterly revenue Thursday, as demand for servers and networking equipment from large firms helped ease slowing PC sales. Total revenue fell 11 percent to $25.04 billion (about Rs. 20,500 crores) in the fourth quarter ended February 3, but came in above Refinitiv’s consensus estimate of $23.39 billion (about Rs. 19,200 crores) taken from 12 analysts. Higher borrowing costs and lower consumer spending affected Dell’s growth, as customers and businesses delayed upgrades to their systems.
But storage and server demand remained a bright spot, thanks to continued digitization by companies and a shift to hybrid work.
Revenue from the company’s Infrastructure Solutions group, which includes servers, storage devices, and networking devices, rose 7 percent in the quarter. Meanwhile, business and consumer revenue, which indicates demand for computers, fell 17 percent and 40 percent, respectively.
However, lifting lockdowns in China, a major market and dominant supplier of electronics components, is seen as a positive for PC manufacturers this year despite weak demand, and will help them rein in costs amid a sobering economic outlook. .
In early February, Dell said it would cut more than 6,000 jobs to cut costs and get out of slumping demand caused by rising inflation and rising interest rates. The company incurred related charges of $367 million (roughly Rs. 3,000 crores) in the fourth quarter.
Smaller rival HP forecast adjusted earnings for the current quarter above estimates and maintained its full-year earnings target earlier this week.
Dell’s net income from continuing operations was $606 million (roughly Rs. 49,650 thousand), compared to a loss of $29 million (roughly Rs. 23,750) in the previous year.
© Thomson Reuters 2023
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