What's in Store for Dell Technologies' (DELL) Q3 Earnings?
Dell Technologies DELL is set to release third-quarter fiscal 2021 results on Nov 24.
For the quarter, the company expects the top line to be seasonally lower, which has typically been flat to down 2% sequentially in previous years.
The Zacks Consensus Estimate for revenues is pegged at $21.93 billion, suggesting a 4% decline from the year-ago reported number.
Further, the consensus mark for quarterly earnings has been steady over the past 30 days at $1.36 per share, suggesting a decline of 22.3% from the year-ago period’s reported figure.
Dell’s earnings beat the Zacks Consensus Estimate in three of the past four quarters, in line with the same in one, the average surprise being 19.1%.
Let’s see how things shaped up prior to this announcement.
Factors to Watch
Dell is expected to have benefited from its dominant position in the enterprise IT-solutions market despite sluggish enterprise spending due to the coronavirus-induced macroeconomic woes.
Markedly, the work-and-learn-from-home necessity has stoked demand for cloud services. Furthermore, the coronavirus-led surge in usage of online and e-commerce services globally has compelled data-center operators to enhance their capacities to accommodate the demand spike for cloud services. This is expected to have benefited Dell in the to-be-reported quarter.
Ongoing momentum at VMware is also likely to have aided Dell, which has an 81% stake in the former. VMware’s expanding product portfolio is likely to have driven its top line in third-quarter fiscal 2021. Solid adoption of cloud, NSX, vSAN, EUC and security solutions is expected to have driven top-line growth.
However, the third-quarter top line is expected to reflect Dell’s share loss in the PC market despite solid demand for commercial PCs driven by coronavirus-led remote working and online-learning wave. This was primarily due to stiff competition from Lenovo and HP . Dell was ranked third by both Gartner and IDC among all PC vendors in their latest third-quarter report. (Read More: )
Additionally, despite data-center strength, the overall server market weakness is expected to have hurt Dell’s top line in the to-be-reported quarter. Moreover, this Zacks Rank #5 (Strong Sell) company’s top-line growth is expected to have suffered from sluggish on-premise hardware spending as both enterprises and small-medium businesses’ customers delayed or scrapped projects.
Moreover, Dell faces stiff competition in the server market from Hewlett Packard Enterprises and IBM, which might have a bearing on the impending quarterly results.
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