Dell Technologies (DVMT) on Thursday reported solid growth in PC and server sales, while it continues to integrate its September 2016 acquisition of data storage firm EMC.
Dell is privately controlled but has a tracking stock that is intended to track the performance of Dell Technologies’ economic interest in the VMware (VMW) stock it acquired from EMC. Dell shares fell 4% to 65.10 on the stock market today, tumbling below their 50-day line and a 65.88 buy point.
Round Rock, Texas-based Dell said its revenue rose 46% year over year to $17.82 billion in its fiscal first quarter ended May 5, reflecting the impact of its purchase of EMC. It posted adjusted operating income of $1.2 billion, up 122%.
Dell’s VMware segment revenue for the first quarter was $1.7 billion, with operating income of $486 million, or 28% of revenue. Dell also announced that it has repurchased $1.1 billion in Class V common stock, the tracking stock in Dell’s VMware stake, since the close of the EMC transaction.
VMware shares, which had already fallen after VMware’s own results on June 1, shed 2.4% to 90.63 on Thursday.
Dell’s Client Solutions Group increased PC shipments by 6.2% year over year and marked 17 consecutive quarters of PC unit share growth. Revenue for the segment rose 6% to $9.1 billion. Operating income was $374 million for the quarter, or 4.1% of revenue.
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Dell’s Infrastructure Solutions Group generated $6.9 billion in sales in the first quarter, which includes $3.2 billion in servers and networking and $3.7 billion in storage, with operating income of $323 million.
Dell remained the worldwide market share leader in x86 servers, with PowerEdge units and revenue growth up by double digits in the fiscal first quarter. But component costs were an issue.
“We’re pleased with overall results in the first quarter of our new go-to-market structure and the demand velocity we saw in a challenging component cost environment,” Tom Sweet, Dell’s chief financial officer, said in a prepared statement. “I’m encouraged by these achievements and excited about the opportunities ahead as we continue to provide a broad portfolio of solutions for our customers’ digital transformations.”
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