Dell misses quarterly revenue estimates on slow PC market recovery

The company's client solutions group posted revenue of $12.28bn (€11.26bn) for the third quarter, marking a near 11% fall
Dell misses quarterly revenue estimates on slow PC market recovery

Dell's servers and networking business revenue was up 9% from the second quarter, fueled by customer interest in generative artificial intelligence, Chief Operating Officer Jeff Clarke said. Pic James Horan/RollingNews.ie

Dell Technologies on Thursday reported third-quarter revenue below estimates due to a slower-than-expected recovery in the hardware and software market, sending its shares down 4% after the bell.

Vendors in the market have seen a slowdown in demand following the surge in sales of electronic devices during lockdowns on the back of increased work-from-home measures.

The company's client solutions group, which includes its consumer and enterprise personal computer business, posted revenue of $12.28bn (€11.26bn) for the third quarter, a near 11% fall compared to a year earlier.

"Dell was not the only PC vendor to face the challenge. However, Dell has more impact than its competitors due to the weakness in the business PC market, which is a core market," said Mikako Kitagawa, analyst at Gartner.

Dell's servers and networking business revenue was up 9% from the second quarter, fueled by customer interest in generative artificial intelligence, Chief Operating Officer Jeff Clarke said.

However, server makers have been struggling with supply constraints for AI chips made by Nvidia, used to run large language models that power apps like ChatGPT.

Revenue for the third quarter came in at $22.25bn (€20.4bn) for Dell, missing estimates of $23bn (€21.1bn), according to LSEG data.

Dell raised its expectations for full-year earnings per share to $6.63, plus or minus 10 cents, compared with its prior forecast of $6.30, plus or minus 20 cents.

Positive results posted by major PC chipmakers like Intel and signaled that recovery is gathering pace in the market ahead of the much awaited holiday season.

The PC market is expected to bank on demand from AI boost, according to research firm Canalys, as it projects adoption of AI-capable PCs to accelerate from 2025 onward, with such devices accounting for around 60% of all PCs shipped in 2027.

Reuters

More in this section

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Lunchtime News
Newsletter

Keep up with the stories of the day with our lunchtime news wrap.

Sign up
Home Delivery
logo-ie

HOME DELIVERY SERVICE

Have the Irish Examiner delivered to your door. No delivery charge. Just pay the cover price.

Revoiced
Newsletter

Sign up to the best reads of the week from irishexaminer.com selected just for you.

Sign up
Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited