Dell Sales Flatten Ahead Of EMC Merger
Dell’s holding company Denali reports revenue down 2 percent year-over-year with sales gloomy for most of Dell’s businesses
Flat Dell sales have contributed to a decline in revenue for its parent company Denali Holdings, as its sales fell 2.4 percent from a year earlier in its first quarter 2017 results.
Denali reported that its revenues had fell three percent year-on-year to $12.6 billion (£8.9bn) last Friday.
While these figures belong to Denali, they can essentially be looked at as Dell Inc’s, as Denali is Dell’s holding company. Denali had forecast revenue of $13.2 billion (£9.3bn) last month.
Merger woes
Denali attributed some losses to the $63 million (£44m) cash acquisition of EMC. Denali’s Clinet Solutions group, which includes Dell’s PC sales managed to make $8.6 billion (£6bn) in sales for the quarter. However, this is still down three percent from the same period last year.
Denali did hit an operating income of $385 million (£272m) though, up 76 percent from the previous year.
“Overall, we were pleased with our results this quarter,” said Tom Sweet, Denali’s Chief Financial Officer.
“We’re continuing to make balanced decisions between growth and profitability, while making investments that position us to address our customers’ critical IT needs in the data centre.”
Essentially, the results painted an altogether unremarkable picture for Dell. Notebook sales saw growth, with some boost in products and services.
Dell’s enterprise hardware business suffered a two percent revenue decline, down to $3.6 billion (£2.5bn). Income from operations fell 20 percent to $192 million (£135m), which Denali pinned on the hiring of new sales staff.
Storage revenue fell 2 percent in the quarter, with Denali CFO Sweet blamed the weaker storage market as customers move to flash software-defined solutions.
Dell’s software division reported revenues were flat at $334 million (£236m), with operating losses down $61 million from last year, down to $100 million (£70.5m).
In the quarter, net income was $55 million (£39m) and Denali delivered approximately $660 million (£465m) in adjusted EBITDA, and our cash flow from operations was $3 billion (£2.1bn) over the past year,” said Mr. Sweet. “We’re committed to our long-term focus to grow revenue and profitability while generating strong cash flow.”
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