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What's in Store for Dell Technologies (DELL) in Q2 Earnings?

Dell Technologies' (DELL) second-quarter fiscal 2022 results are expected to reflect slowing PC market trend and supply chain issues on server market.

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This story originally appeared on Zacks

Dell Technologies DELL is set to release second-quarter fiscal 2022 results on Aug 26.



The company expects second-quarter revenues to increase roughly 6% sequentially, which is below the historical rate, primarily due to supply chain issues.



The Zacks Consensus Estimate for revenues is pegged at $25.40 billion, suggesting 11.7% growth from the year-ago reported number.



The consensus mark for quarterly earnings has been steady over the past 30 days at $2.04 per share, suggesting growth of 6.3% from the year-ago quarter’s reported figure.



Dell’s earnings beat the Zacks Consensus Estimate in all of the past four quarters, the average earnings surprise being 34.3%.

 

- Zacks

Dell Technologies Inc. Price and EPS Surprise

Dell Technologies Inc. Price and EPS Surprise

Dell Technologies Inc. price-eps-surprise | Dell Technologies Inc. Quote

 

Let’s see how things have shaped up for Dell prior to this announcement.

Factors to Watch

Dell’s fiscal second-quarter results are expected to have benefited from its dominant position in the enterprise IT-solutions market. However, supply chain headwinds are expected to have negatively impacted server business. Per Gartner, server shipments declined 2.8% year over year due to weak demand from the hyperscale segment.



Dell topped IDC’s server vendor list for first-quarter 2021, followed by Hewlett Packard Enterprise HPE. Supply chain headwinds are expected to have hurt the momentum in the to-be-reported quarter.



This Zacks Rank #2 (Buy) faces stiff competition in the server market from Hewlett Packard and International Business Machines IBM, which might have a bearing on its impending quarterly results. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



The second-quarter top line is expected to reflect Dell’s strong position in the PC market amid solid demand for commercial PCs driven by coronavirus-led remote-working and online-learning wave. Dell was ranked third according to IDC among all PC vendors in its latest second-quarter report, trailing Lenovo and HP HPQ.



Dell’s fiscal second-quarter results are expected to reflect slowing PC demand for the upcoming quarters.



Higher component costs are expected to have hurt profitability. Dell expects operating income to be down low- to mid-single digits sequentially on an absolute dollar basis.

Q2 Key Highlights

NBC Olympics, a division of the NBC Sports Group, selected Dell to provide high-performance storage systems for its production of the Games of the XXXII Olympiad.

On Jul 13, Dell announced its commitment to reach net zero greenhouse gas emissions across Scopes 1, 2 and 3 by 2050.



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HP Inc. (HPQ): Free Stock Analysis Report

 

International Business Machines Corporation (IBM): Free Stock Analysis Report

 

Dell Technologies Inc. (DELL): Free Stock Analysis Report

 

Hewlett Packard Enterprise Company (HPE): Free Stock Analysis Report

 

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