Dell overperforms in final quarter of fiscal year, forecasts higher revenue in 2020, and looks to channel partners to drive storage sales
Dell Technologies posted stronger-than-expected revenue in its final quarter of
The Lowdown: Dell’s stock price is up 22 percent since returning to the stock market in December 2018. While the rest of the technology market is forecasting mixed performance in 2019, Dell sees nothing by double-digit growth ahead.
The Details: Dell’s server and networking business grew 14 percent in the quarter ending Feb. 1 to $5.3 billion. The Infrastructure Solutions Group, which holds the server and networking products, saw sales grow 10 percent to $9.9 billion. The PC group posted sales of $10.9 billion, up 4 percent quarter over quarter.
Dell is optimistic about
While Dell did not give specific credit to channel partners for driving growth, it did say resellers and integrators are playing a significant role in the company’s go-to-market strategy. Nearly half of Dell’s sales go through the channel. In the earnings transcript, Dell says it’s tweaking sales and channel compensation to drive performance behavior. Specifically, Dell is looking to incent partners to expand the sale of storage products and value-add services.
Background: Dell returned to Wall Street after five years as a private company following the buying of VMware stock. Some analysts expected Dell share volume and sales to fall. The company defied expectations and continues to expand revenue and profit performance. Despite the higher-than-expected 2020 earnings forecast, CFO Tom Sweet says the goal is improving profitability, not necessarily revenue.