Dell Inc. released its third-quarter financial results after the market closed on Tuesday, Eastern Time. While revenue slightly missed Wall Street expectations, the company projected better-than-expected results for the fourth quarter—a key reason being increased sales of its AI servers. Following this, Dell's stock rose 3.48% in after-hours trading.
Dell raises earnings forecast
The financial report shows that, compared to analyst expectations compiled by LSEG:
Earnings per share: Adjusted at $2.59, compared to an expected $2.47.
Revenue: $27.01 billion, compared to an expected $27.13 billion.
Dell Inc. said it expects fourth-quarter sales of approximately $31.5 billion, significantly better than analysts’ expectations of $27.59 billion. The company also said it expects fourth-quarter earnings per share of $3.50, compared to an expected $3.21.
The company also revised its full-year revenue forecast upward from $105 billion to $109 billion to $111.2 billion to $112.2 billion.
The company stated that it is optimistic about artificial intelligence this year. The forecast for server shipments has been revised upward from $20 billion to $25 billion .
Strong demand for AI servers
As based on NVIDIA Dell, a leading supplier of GPUs for artificial intelligence systems, is a key indicator of the health of the AI infrastructure industry.
Dell's primary customers for its AI systems are large enterprises, governments, and so-called "neoclouds" companies like CoreWeave. However, Dell sells less to hyperscale cloud companies, which have been Nvidia's largest buyers to date.
The company stated that it expects to sell $9.4 billion worth of AI servers in the fourth quarter of this year, not including a deal announced in November with Iren (a Microsoft subsidiary). The new cloud company that provides AI computing power has secured an order for the GB300 system.
Dell's Infrastructure Solutions division (i.e., data center) The business unit reported quarterly sales of $14.11 billion, in line with analysts' expectations. Of this, $10.1 billion came from servers and network components, a 37% year-over-year increase. This growth was primarily driven by $5.6 billion in AI server shipments. Dell also stated that it sold $4 billion worth of storage devices during the quarter.
Dell’s Client Solutions segment (i.e., the Notebook and PC business) reported sales of $12.48 billion, up 3% year-over-year, but slightly below analysts’ expectations of $12.65 billion.
The company stated that it spent $1.6 billion on share buybacks and dividends this quarter.
(Article source: CLS)
