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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.

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%.


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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


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


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


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