Dell Technologies Q3 Earnings Analysis: Key Metrics Compared to Estimates

Dell Technologies (DELL) released its earnings report for the quarter ending in October 2024, revealing important figures that shed light on its financial performance. The company's total revenue for the quarter reached $24.37 billion, marking a year-over-year growth of 9.5%. In terms of earnings, the Earnings Per Share (EPS) stood at $2.15, compared to $1.88 in the same quarter the previous year.

However, while investors often focus on year-over-year changes in revenue and earnings, it is crucial to compare these figures to Wall Street forecasts to gain deeper insights into the company's trajectory. The reported revenue of $24.37 billion fell short of the Zacks Consensus Estimate, which anticipated $24.56 billion, resulting in a revenue surprise of -0.79%. In contrast, the EPS exceeded the consensus estimate of $2.06, producing a positive surprise of +4.37%.

Examining additional key metrics provides a clearer picture of Dell Technologies' performance this quarter. Below are some of the metrics most commonly scrutinized by analysts:

• Net Revenue - Client Solutions Group: The revenue from the Client Solutions Group was $12.13 billion, which slightly missed the average estimate of $12.32 billion from three analysts, representing a year-over-year decrease of -1.2%.
• Net Revenue - Infrastructure Solutions Group: In contrast, this segment saw revenue of $11.37 billion, surpassing the analyst estimate of $11.28 billion, and showing an impressive +33.8% increase year over year.
• Net Revenue - Other Businesses: Sales from other businesses amounted to $867 million, which fell short of the expected $876.37 million, reflecting a substantial decline of -41.2% compared to the previous year.
• Net Revenue - Client Solutions Group - Consumer: Revenue from the Consumer side of the Client Solutions Group was $1.99 billion, lower than the expected $2.07 billion and down -18.4% from the same quarter last year.
• Net Revenue - Infrastructure Solutions Group - Storage: The storage segment generated $4 billion, outperforming the estimate of $3.89 billion, and grew by +4.2% year over year.
• Net Revenue - Client Solutions Group - Commercial: In the commercial area, revenue was $10.14 billion, slightly below the forecast of $10.24 billion, but it did show growth of +3.1% from the prior year.
• Net Revenue - Infrastructure Solutions Group - Servers and Networking: This category performed well, bringing in $7.36 billion, just under the estimate of $7.39 billion with a significant year-over-year increase of +58.2%.
• Operating Income - Client Solutions Group: The operating income for this segment was reported at $694 million, falling short of the projected $759.94 million based on the estimates of two analysts.
• Operating Income - Infrastructure Solutions Group: Here, the company reported an operating income of $1.51 billion, exceeding the estimate of $1.39 billion.

Overall, shares of Dell Technologies have shown resilience, with a return of +19.5% over the past month, while the S&P 500 composite index increased by +3.2%. Currently, the stock holds a Zacks Rank #3 (Hold), indicating that it might perform in line with the broader market in the near future.

Dell, Earnings, Revenue