Dell Dips 9% as Q4 Earnings Miss Estimates

Shares of Dell Technologies (DELL) fell 9% in the extended trading session on Thursday after the American multinational technology company reported mixed fourth-quarter Fiscal Year 2022 results.

Q4 Performance

The company reported adjusted earnings of $1.72 per share, which lagged the consensus estimate of $1.94 per share and declined 2% from adjusted earnings of $1.76 per share reported in the same quarter last year. 

Total net revenue of $28 billion grew 16% year-over-year and topped analysts’ expectations of $27.5 billion. The upside was supported by growth in all business units, along with strong demand across commercial PCs, servers and storage. 

Adjusted EBITDA for the fourth quarter stood at $2.69 billion, up 3% year-over-year. Notably, at the end of the quarter, Dell had remaining performance obligations of $42 billion, up 20% year-over-year, along with deferred revenue of $27.6 billion and cash and investments of $11.3 billion.

Segment-wise, Client Solutions Group recorded revenues of $17.3 billion, up 26% year-over-year. Additionally, revenues for Infrastructure Solutions Group came in at $9.2 billion, up 3% year-over-year.

Dividend

Alongside earnings, Dell announced the initiation of a quarterly common stock of $0.33 per share. The dividend will be payable on April 29 to stockholders of record as of April 20. The company anticipates aggregate fiscal 2023 dividends of about $1 billion.

The CFO of Dell, Tom Sweet, said, “We remain focused on executing our strategy to consolidate and modernize our core and build new growth engines that enable our customers’ multi-cloud future while delivering shareholder value.”

Wall Street’s Take  

Overall, the Street has a bullish outlook on the stock, with a Strong Buy consensus rating based on 3 Buys and 1 Hold. The average Dell price target of $69.50 implies 24.5% upside potential. 

Blogger Opinion

TipRanks data shows that financial blogger opinions are 91% Bullish on DELL, compared to a sector average of 69%.

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