Dell's holding company Denali posted preliminary financial results on Friday for the three months ending on April 29, 2016. The company can't provide final results for the period, it said, because it's still finalizing the sales of certain businesses to fund the EMC acquisition.
Denali does expect to confidentially release first quarter fiscal 2017 results to current holders of Dell debt securities and prospective debt investors on June 2.
The company posted a non-GAAP operating loss of $100 million, with non-GAAP net revenues of $13.3 billion and non-GAAP operating income of $600 million.
By comparison, for the three months ending May 1, 2015, the company had an operating loss of $300 million, non-GAAP net revenues of $13.7 billion and non-GAAP operating income of $500 million.
When Dell acquired EMC for $67 billion in October, it took on a $59 billion debt load. It's financing that in part by selling off Dell Services, its IT services business, to the Japanese telecom firm NTT for about $3.1 billion. The results of Dell Services are included in the preliminary financial results and will be presented as discontinued operations in the Q1 2017 financial statements. Denali expects the Dell Services transaction to close in the third quarter of fiscal 2017.
To further fund the acquisition, Dell may sell more than $16 billion of notes on the investment grade bond market next week, in what would be the second-largest corporate bond sale of the year.
In the S-4 document filed with the SEC earlier this week, Denali wrote in the that the company has "an objective of reducing its indebtedness in the first 18-24 months after completion of the merger and achieving an investment grade credit rating for such indebtedness. The cash necessary to achieve that objective is expected to come from divestitures of non-core businesses of the DHI Group, including EMC, cash flows from operations of the DHI Group and cash generated by reductions in the working capital needed to operate the DHI Group."