SAN FRANCISCO: Dell Inc's quarterly margins and profit beat Wall Street expectations and it raised its yearly income forecast on solid demand from large corporations and lower component costs, sending shares 6.2 percent higher on Thursday, Nov 18.
The world No. 2 PC maker, which benefited from falling prices for components such as hard drives and memory, expects full-year revenue to track toward the mid-point of the 14 percent to 19 percent growth range set earlier this year.
It expects non-GAAP operating income should grow between 28 and 32 percent, above an earlier forecast.
However, revenue came in below analysts' average forecast.
Dell's shares were halted after-hours before rising 6.2 percent to $14.51 from their close of $13.67 on Nasdaq.
Analysts pointed to a big beat on Dell's closely watched gross margin number: about 20 percent in the third quarter versus expectations of 17.5 percent.
"Gross margin is obviously the key headline here at 20 percent, obviously well above the Street," said Stifel Nicolaus analyst Aaron Rakers. "Leverage in the model is going to be key as people gauge the sustainability of what was a very strong gross margin number."
Dell consequently beat earnings forecasts by a wide margin. It reported net earnings for the third quarter ended Oct. 29 of $822 million, or 42 cents a share, up from $337 million, or 17 cents a share, in the year-ago period.
Excluding items, Dell earned 45 cents a share, better than the average analyst estimate of 32 cents a share, according to Thomson Reuters I/B/E/S.
But revenue rose 19 percent to $15.4 billion, below Wall Street's estimate of $15.76 billion.
Shares of Round Rock, Texas-based Dell had gained 2.4 percent in the regular session. - Reuters
The world No. 2 PC maker, which benefited from falling prices for components such as hard drives and memory, expects full-year revenue to track toward the mid-point of the 14 percent to 19 percent growth range set earlier this year.
It expects non-GAAP operating income should grow between 28 and 32 percent, above an earlier forecast.
However, revenue came in below analysts' average forecast.
Dell's shares were halted after-hours before rising 6.2 percent to $14.51 from their close of $13.67 on Nasdaq.
Analysts pointed to a big beat on Dell's closely watched gross margin number: about 20 percent in the third quarter versus expectations of 17.5 percent.
"Gross margin is obviously the key headline here at 20 percent, obviously well above the Street," said Stifel Nicolaus analyst Aaron Rakers. "Leverage in the model is going to be key as people gauge the sustainability of what was a very strong gross margin number."
Dell consequently beat earnings forecasts by a wide margin. It reported net earnings for the third quarter ended Oct. 29 of $822 million, or 42 cents a share, up from $337 million, or 17 cents a share, in the year-ago period.
Excluding items, Dell earned 45 cents a share, better than the average analyst estimate of 32 cents a share, according to Thomson Reuters I/B/E/S.
But revenue rose 19 percent to $15.4 billion, below Wall Street's estimate of $15.76 billion.
Shares of Round Rock, Texas-based Dell had gained 2.4 percent in the regular session. - Reuters
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