Dell Technologies Q1 highlights solid PC, server demand, but higher component costs

Dell CFO Tom Sweet said the company saw good demand, but component costs were "challenging."


Dell Technologies delivered $17.8 billion in first quarter revenue, said it has integrated its sales teams following the merger with EMC and delivered 6 percent revenue growth in the unit with PCs and laptops.

The company said it reported a first quarter operating loss of $1.5 billion. On a non-GAAP basis, Dell said it reported operating income of $1.2 billion on revenue of $18.2 billion.

Dell Technologies is privately held, but owns VMware, which is sold as a tracking stock. Dell Technologies also reports results for bondholders.

One big takeaway from the Dell results is that component costs increased. Dell CFO Tom Sweet said the company saw good demand, but component costs were "challenging." Dell Technologies ended the first quarter with cash and investments of $14.9 billion and long-term debt of $45 billion. Dell said it has paid down $7.1 billion in gross debt since merging with EMC and ended the quarter with $50.7 billion in total debt.

As for the business units, Dell's client solutions group delivered first quarter operating income of $374 million on revenue of $9.1 billion, up 6 percent from a year ago. The company saw strong consumer demand with commercial growing too.


The infrastructure solutions group had $6.9 billion in revenue with operating income of $323 million. Servers and networking sales were $3.2 billion in the first quarter with $3.7 billion in storage. Dell Technologies said that all-flash arrays, PowerEdge units and hyperconverged systems all grew at least double-digit percentage rates.


VMware, which reported last week, was also included in Dell's results.