Yeah, yeah, PCs are dead? Ask Texan Mick and his Dell empire if that's the case

Computers bring home the bacon for US biz in Q2

Good old fashioned sales of business PCs is keeping growth at Dell Technologies chugging along, more than compensating for crappy sales of server and networking gear.

Coming hot on the heels of financials from rivals HPE, Cisco and NetApp, Dell Tech - the home of Dell EMC and VMware - last night reported a 2 per cent year-on-year rise in revenue for its Q2 ended 2 August to $23.37bn - ahead of analyst estimates of $23.27bn.

The Client Solutions group that comprises the desktop and notebook lines jumped 6 per cent to $11.748bn: the commercial PCs part was up 12 per cent to $9.1bn, but consumer PCs fared less well, falling 12 per cent to $2.7bn.

Jeff Clarke, vice chairman of products and operations at Dell, said on an earnings call with analysts that there was a "clear split between enterprise infrastructure and PC spending globally".

Windows 10 continued to drive commercial PC refreshes among corporate customers and the imbalance in the supply chain, with supply outweighing demand, had led to lower component prices and spurred some extra purchases. Dell, along with Lenovo and HP now own account for around two thirds of global PC sales.

The Infrastructure Solutions Group reported a 7 per cent drop in revenue to $8.621bn: the storage bit was flat at $4.3bn, while servers and networking fell 12 per cent to $4.4bn.

Clarke said the infrastructure market was "softer than we and the industry anticipated. We expected demand to remain soft through the balance [of the year]".

Rivals enterprise kit makers noted in recent days and weeks that trade tensions between China and the US were causing uncertainty that fed into a relative slowdown in spending.

Clarke said Dell added 21,000 ISG customers in the first six months of its fiscal '20, up 11 per cent. He didn't, however, say how many clients defected to competitors during that period.

VMware, which is majority-owned by Dell Technologies, reported sales of $2.5bn, up 12 per cent.

The remaining group revenue came from Dell's "Others" section, which is comprised of Pivotal, SecureWorks, RSA, Virtustream and Boomi.

Dell repaid $2bn in gross debt in the quarter and repaid $400m in Q1. It expects to repay $5bn in current financial year. CFO Thomas Sweet pointed out Dell has now coughed $17bn gross debt since the EMC buy.

A tax benefit dragged Dell into the black to the tune of $3.689bn versus a net loss of $499m a year earlier. ®

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