Dell report First Quarter Profit Dell beat analysts’ expectations for profit and revenue on Thursday, emerging as one of the top vendors of artificial intelligence servers, but its shares fell more than 15% in after-hours trading on concerns that Dell’s AI servers have yet to deliver big benefits to the company.
Here’s how Dell performed compared to LSEG’s consensus estimates:
- Earnings per ShareAdjusted: $1.27 (expected: $1.26)
- Revenue: $22.24 billion vs. $21.64 billion (estimated)
The company said it expects current-quarter earnings per share of $1.65 on revenue of $23.5 billion to $24.5 billion. Analysts surveyed by FactSet were expecting $23.35 billion. Dell expects full-year revenue of $93.5 billion to $97.5 billion.
Dell reported quarterly net income of $955 million, or $1.32 per diluted share, compared with $578 million, or 79 cents a share, in the same period last year. Overall quarterly revenue was up 6% year over year.
Dell’s Infrastructure Solutions Group, the data center sales division, saw revenue grow 22% year over year to $9.2 billion. The company noted that its server division is growing fast, with revenue up 42% to $5.5 billion and demand for AI servers being strong. Still, the division’s year-over-year operating profit was flat, “resurfacing concerns that AI servers are being sold at near-zero margins,” Bernstein’s Toni Sacconaghi said in a note to investors Friday morning.
Dell has emerged as a top vendor of AI-oriented servers, which are in high demand as businesses invest in predictive and generative AI infrastructure. NVIDIA At the conference, CEO Jensen Huang named Dell founder Michael Dell as the person to contact for orders for the company’s new chips.
Dell announced that it booked $2.6 billion in “AI-optimized” server orders during the quarter.
Prior to Thursday’s report, Dell’s shares were expected to more than double in 2024.
Dell’s PC and laptop division, the Client Solutions Group, saw flat growth on an annual basis with sales of $12 billion.