Data center News
Dell’s 5 Big Earnings Takeaways: Supply Chain Woes, Price Changes And Record Sales
From supply chain woes and potential pricing increases ahead to its record-breaking $101 billion fiscal year 2022, CRN breaks down the five biggest takeaways from Dell Technologies’ recent fourth-quarter financial earnings report.
Supply Chain Woes: ‘Impact Across Client Systems, Servers And Storage’
Like many IT companies in 2022, Dell is dealing with component shortage issues even as it reported a 16 percent sales increase during its fourth quarter.
“We are still experiencing shortages of integrated circuits across a wide range of devices, including network controllers and microcontrollers, that go into our products and solutions,” said Clarke. “The result: We are seeing an impact across client systems, servers and storage.”
Dell executives said the company experienced a record backlog in its Infrastructure Solutions Group in the fourth quarter as a result of a shortage of components, and that backlog will likely remain high through the first half of this year. Dell’s ISG consists of its market-leading storage, server and hyperconverged infrastructure portfolio.
Other than supply chain issues, freight costs have continued to rise due to increased logistics rates, a higher mix of air shipments due to ocean network congestion, and an increase in part expedites, according to Dell.
“As we head into Q1, we do expect component costs to improve with modest deflation while freight costs remain elevated,” Clarke said. “Our supply chain speed, agility and flexibility has enabled us to meet customer needs in this environment, though challenges remain. And our supply chain continues to be a durable competitive advantage as we navigate the unprecedented supply uncertainty.”