Dell Shares Fell 10 Percent After Earnings Report: Why The Drop?
Dell’s shares fell 10 percent following its fourth-quarter financial earnings report, dropping from $55.78 on Feb. 24 to $50.16 per share on Feb. 25.
Although fourth-quarter revenue increased 16 percent to $28 billion, Dell reported a net income loss from continuing operations of $29 million for its fourth quarter.
Another reason why Dell’s stock likely fell is that Dell’s fourth-quarter earnings of $1.72 per share failed to meet Wall Street’s expectations of $1.95 per share.
The final reason for the stock drop was likely due to Dell unveiling its supply chain shortcomings and backlogs, specifically dealing with the semiconductor industry and its red-hot PC business.
Dell’s share price has climbed slightly over the past several days to $51.39 per share as of Monday morning.
Overall, Dell executives said they were pleased with the company’s performance and strategy in fiscal year 2022.
“In closing, we delivered an extraordinary year with record revenue, operating income, EPS and cash flow,” said Dell’s Sweet. “We delivered significant shareholder value through the spin-off of VMware, the sale of Boomi and disciplined and consistent debt paydown, resulting in an investment-grade rating. … We remain focused on executing our strategy to consolidate and modernize our core and build new growth engines that enable our customers’ multi-cloud future while delivering revenue and EPS growth with strong free cash flow to our shareholders over time.”