Dell Stock: Dell Technologies Misses Q4 Earnings Target

Computer hardware giant Dell Technologies (DELL) late Thursday beat Wall Street’s sales target in its fiscal fourth quarter, thanks to record PC shipments. But it missed expectations for earnings in the period. Dell stock dropped in extended trading.

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The Round Rock, Texas-based company earned an adjusted $1.72 a share on sales of $27.99 billion in the quarter ended Jan. 28. Analysts had expected Dell earnings of $1.95 a share on sales of $27.5 billion, according to FactSet. On a year-over-year basis, Dell earnings fell 2% while sales grew 16%.

Dell blamed a higher-than-anticipated effective tax rate for the lower-than-expected earnings.

Revenue in Dell’s PC unit increased 26% year over year to $17.3 billion in the fourth quarter. Commercial PC sales surged 30% to $12.9 billion while consumer PC sales rose 16% to $4.4 billion.

Dell’s Infrastructure Solutions Group saw sales rise 3% to $9.2 billion in the quarter. The unit includes servers, networking and data storage gear.

Dell Stock Retreats After Report

In other news, Dell announced plans to start paying a quarterly cash dividend. The initial quarterly dividend of 33 cents a share will be payable on April 29 to stockholders of record as of April 20.

In after-hours trading on the stock market today, Dell stock plummeted 7.8%, near 51.50. During the regular session Thursday, Dell stock dropped 1.7% to close at 55.84.

Dell stock ranks second out of 13 stocks in IBD’s Computer Hardware and Peripherals industry group. It has an IBD Composite Rating of 90 out of 99, according to IBD Stock Checkup.

On Nov. 1, Dell completed the spinoff of its 81% equity ownership of VMware (VMW).

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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