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Server business woes dampen Dell's revenue tally

Server business woes dampen Dell's revenue tally

Revenue from its server and networking unit dropped 16.1 per cent to US$4.24 billion

Credit: Dreamstime

Dell Technologies has missed Wall Street estimates for quarterly revenue as its server business wrestled with higher costs and lower demand in a market hit by US-China trade tensions.

Revenue from its server and networking unit dropped 16.1 per cent to US$4.24 billion in the third quarter ended Nov. 1, overshadowing a 11.4 per cent rise in sales in its software maker VMware unit.

US technology companies with a sizeable exposure to China are bearing the brunt of the 16-month long trade war, which has rattled global supply chains and manufacturing, fanning fears of an economic slowdown.

Earlier this month, Cisco Systems forecast quarterly revenue and profit below estimates, citing trade uncertainties.

Dell had previously warned that softness in the server market would continue in the second half, as companies cut back on orders.

Client Solutions Group, which includes desktop PCs, notebooks and tablets, reported a 4.6 per cent rise in revenue to US$11.41 billion.

The Texas-based company reported total revenue of US$22.84 billion for the latest quarter, narrowly missing estimates of US$23.04 billion, according to IBES data from Refinitiv.

The company's net income was US$552 million, compared with a loss of US$895 million a year earlier.

Excluding items, the company earned US$1.75 per share, while analysts were expecting a profit of US$1.62 per share.

(Reporting by Neha Malara in Bengaluru; Editing by Anil D'Silva)


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