Dell Technologies Inc (NYSE: DELL) stock rises driven by notebooks demand

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Dell Technologies Inc (NYSE: DELL) stock rose 0.022% after the company posted better than expected results for its fiscal first quarter on the back of demand for notebooks grew up as more people switched to working and learning from home. The company has the  highest share position to-date for worldwide PCs at 19.4% and in commercial PCs, Dell move to number two worldwide with 26.2% unit share. The forex movement, particularly in the euro zone, Brazil and China, created a headwind this quarter, that had affected the growth by approximately 170 basis points. Gross margin had contracted by 1% to $7.3 billion or 33.4% of revenue due to the strong CSG performance along with the mix shift to large commercial and government customers. Operating income fell down to 2% to $2.2 billion or 9.8% of revenue. The company has reported 5% fall in the consolidated net income to $1.1 billion. The company ended the first quarter with $13.2 billion of cash and investments. This includes the cash from the $2.25 billion of notes issued by Dell Technologies and $2 billion issued by VMware in the first quarter. The total debt balance ended the first quarter at $57.3 billion, and core debt ended the first quarter at $36.6 billion.

DELL in the first quarter of FY 20 has reported the adjusted earnings per share of $1.34, beating the analysts’ estimates for the adjusted earnings per share of $1.01, according to the Zacks Consensus Estimate. The company had reported flat adjusted revenue to $21.90 billion in the first quarter of FY 20, beating the analysts’ estimates for revenue by 3.09%. Client Solutions Group posted the revenue of $11.1 billion, up 2%. Commercial revenue was up 4% to $8.6 billion, including double-digit order growth in commercial notebooks and mobile workstations. Consumer revenue fell down 5% to $2.5 billion, as the company shifted supply to direct from retail. The consumer direct orders were up about 40%, while consumer retail orders were down 37%.

Moreover, CSG operating income was $592 million or 5.3% of revenue. CSG profitability was affected due to a higher mix of large commercial and government customers and less deflationary component costs compared to a year ago. ISG revenue was down 8% to $7.6 billion. Storage revenue was down 5% to $3.8 billion. Servers and networking revenue was down 10% to $3.8 billion.

The company expects Q2 revenue to be seasonally lower than prior years, which has generally been up to 6% to 8% sequentially from the first quarter

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