Dell Technologies Inc reported a 15 per cent rise in quarterly revenue on Thursday, as businesses were forced to upgrade their systems running on older Windows technology and on a strong performance by software maker VMware.
The results come ahead of voting on the company’s offer to buy back shares tied to its 81 per cent economic stake in VMware Inc, which would allow Dell a return to public markets without going through the rigours of a traditional initial public offer process.
Dell earlier this month sweetened its cash-and-stock offer to USD 23.9 billion, winning backing from shareholders including Carl Icahn, who had opposed the initial bid, as well as from Elliott Management and Canyon Partners.
“We expect the transaction to close in this calendar year, with the projected close date and the first day of trading for the Class C common stock on the NYSE under the ticker symbol ‘DELL’ on December 28,” Dell’s head of investor relations Robert Williams said on a conference call with analysts.
The offer is scheduled to be voted on Dec.11.
Dell reported an 11 per cent jump in revenue from its Client Solutions Group, which includes products such as desktop PCs, notebooks and tablets, and branded peripherals, for the third quarter ended Nov. 2.
The gain was largely due to businesses looking to replace their older machines following Microsoft Corp’s decision to stop all support for its Windows 7 operating system early in 2020.
“The market has reached a state of stabilisation so far this year, primarily driven by strong commercial demand driven by Windows 10 upgrades, being linked to end of Windows 7 support,” said Ishan Dutt, an analyst with research firm Canalys.
Dell held 17 per cent of the global PC market share year-to-date, behind HP Inc’s 23 per cent and Lenovo Group Ltd’s 21 per cent share, according to data from Canalys.
HP Inc on Thursday reported an 11 per cent rise in revenue in its personal systems business, which also topped analysts’ estimates.
On the call, Dell executives said the company has successfully navigated the current list of tariffs.
“Where we have incurred in higher cost with tariffs, we can pass that through to end users,” Chief Operating Officer Jeffrey Clarke said.
For the fiscal year ending 2019, the company expects total adjusted revenue in the range of USD 90.5 billion and USD 92 billion. The company had reported adjusted revenue of USD 79.9 billion for the fiscal year ended Feb.2, 2018.
Total revenue rose 15 per cent to USD 22.48 billion in the quarter, while net loss attributable widened to USD 876 million.
VMware posted robust results, beating on both profit and revenue estimates on strong demand for its software to boost cloud computing efficiency.
The company’s shares, up about 30 per cent this year, rose nearly 8 per cent to USD 174.65 after the bell.
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