Dell Technologies Inc (NYSE: DELL) stock rose over 1.7% in the pre-market session of Feb 26th, 2021 (Source: Google finance) as the company posted better than expected earnings estimates for the fourth quarter of FY 20. The company reported the consolidated net income of $2.3 billion, which is an increase of 36%. Client Solutions Group (CSG) revenue up 17% to $13.8 billion in the quarter as the company delivered record shipments again in the quarter. Commercial revenue was up 16% to a record high $9.9 billion as the company continues to see strong growth in Latitude and Precision notebooks and Commercial Chromebooks. Consumer revenue also reached a record at $3.8 billion, up 19%, driven by strength across all of the consumer notebooks and gaming systems. CSG operating income was up 67% to $1 billion and was 7.6% of revenue.
ISG revenue was $8.8 billion, which was flat year-over-year, but up 10% sequentially. Storage revenue was $4.4 billion, down 2%. Midrange, PowerProtect Data Domain and VxRail were highlights as all 3 saw solid orders growth. ISG operating income was a record at $1.2 billion or 13.5% of revenue, which was up 80 basis points as the company benefited from lower operating expense in an improving demand environment. The VMware business unit also had a record quarter, posted revenue of $3.3 billion, up 6%, and operating income of $1.1 billion or 32.2% of revenue. Based on VMware’s standalone results, subscription as-a-Service revenue rose 27%.
DELL in the fourth quarter of FY 20 has reported the adjusted earnings per share of $2.70, beating the analysts’ estimates for the adjusted earnings per share of $2.19, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 8 percent to $26.15 billion in the fourth quarter of FY 20, driven primarily by the strong growth in the CSG and VMware businesses, with improvement in our ISG business. Gross margin was $8.6 billion, up 3% and 33% of revenue. Gross margin as a percent of revenue was 170 basis points lower, due to the overall mix shift to CSG driven by the strong client demand environment. The company generated Q4 cash flow from operations of $5.9 billion and adjusted free cash flow in the quarter was $5.5 billion, up 46%. Cash and investments at the end of the fourth quarter was $15.8 billion and approximately $10.6 billion at core Dell.