Data center News
Dell Storage Sales Rise To $4B As Company Lowers Net Loss
Dell Technologies' storage charge is starting to pay off as the company reported on Monday a 10 percent increase in storage sales for its first fiscal quarter, while beating Wall Street's overall revenue estimates and recording a narrower net loss.
Dell reported storage sales of $4.08 billion for its first fiscal quarter, which ended May 4, representing a 10 percent increase year over year. The Round Rock, Texas-based infrastructure giant said it expected to see first quarter of storage share gain since closing its blockbuster acquisition of EMC in 2016 for $58 billion. Research firm IDC is expected to release first quarter storage sales data this week. This is a complete turnaround from the company's previous fourth fiscal quarter where Dell reported a storage sales drop of 11 percent year over year.
"[We] expect to gain share in storage," said Jeff Clarke, vice chairman, products and operations for Dell, during the company's quarterly earnings call with media and analysts on Monday. "We're pleased, but not satisfied."
Clarke is leading Dell's biggest storage product roadmap initiative to realign its engineering teams to focus on a single product line for each market segment aimed to accelerate product innovation.
Although the privately-run Dell reported a narrower net loss than a year ago, the company beat analysts' sales forecasts of $19.4 billion by generating a total of $21.36 billion in the first quarter, up 19 percent year over year. Dell's tracking stock slightly fell less than 1 percent after Monday's earnings announcement to $84.36 per share at press time.
Clarke recently told CRN that he has spent the past few months breaking down the storage silos created when Dell acquired EMC. He became the leader of Dell's Infrastructure Solutions Group (ISG) in September. "At the core, what do I bring [to ISG]? I bring a disciplined R&D approach that has a track record of innovating and differentiating in the market place and winning -- that's what I'm going to do," Clarke said in an interview with CRN.
The company reported a first quarter net loss of $636 million, or $1.95 per share, which was 46 percent lower than Dell's loss of $1.17 billion, or $2.29 per share, the same quarter one year ago.
Dell ISG group -- which includes servers, networking, data protection and storage sales – reached $8.7 billion in the quarter, up 25 percent year over year. The company's networking and server revenues hit $4.6 billion, up 41 percent compared to the same quarter one year ago. Dell reported triple-digit growth for VxRail and VxRack, which are the company's hyper-converged infrastructure solutions.
For Dell's Client Solutions Group, which includes PCs and workstation solutions, the company reported $10.3 billion in sales, an increase of 14 percent year over year. PC shipments increased 6 percent, representing 21 consecutive quarters of year over year PC unit share growth.
During the quarter, Dell paid down approximately $600 million of debt. The company's core debt balance currently stands at $39.8 billion. Dell said it has paid down a total of $13 billion in core debt since the close of the EMC deal.
Other businesses within Dell Technologies -- including RSA, Pivotal, Secureworks, Virtusteam and Boomi -- generated a total of $579 million, up 9 percent year over year.