Dell misses income estimates on weak point in server business

Dell misses income estimates on weak point in server business

FILE PHOTO: A Dell gaming computer system is revealed at the E3 2017 Electronic Home Entertainment Exposition in Los Angeles, California, U.S. June 13,2017 REUTERS/ Mike Blake

( Reuters) – Dell Technologies Inc ( DELL.N) missed out on Wall Street price quotes for quarterly earnings on Tuesday as its server service wrestled with greater expenses and lower need in a market hit by U.S.-China trade stress.

Revenue from its server and networking system dropped 16.1%to $4.24 billion in the third quarter ended Nov. 1, overshadowing a 11.4%increase in sales in its software maker VMware ( VMW.N) system.

U.S. innovation business with a significant direct exposure to China are bearing the brunt of the 16- month long trade war, which has rattled global supply chains and production, fanning fears of a financial downturn.

Previously this month, Cisco Systems Inc ( CSCO.O) anticipated quarterly earnings and earnings listed below price quotes, pointing out trade uncertainties.

Dell had previously warned that softness in the server market would continue in the 2nd half, as business cut down on orders.

Client Solutions Group, which includes desktop PCs, note pads and tablets, reported a 4.6%rise in income to $1141 billion.

The Texas-based business reported total revenue of $2284 billion for the latest quarter, directly missing out on estimates of $2304 billion, according to IBES information from Refinitiv.

The company’s net income was $552 million, compared to a loss of $895 million a year earlier.

Excluding products, the company made $1.75 per share, while analysts were anticipating an earnings of $1.62 per share.

Reporting by Neha Malara in Bengaluru; Editing by Anil D’Silva

Learn More