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Dell Shares Slump 4% After Revenue Miss

Shares in Dell Technologies slumped over 4% in after-hours trade, with weak server demand impairing PC and profitability growth.

Fiscal first quarter revenue lift 2.6% to $21.9 billion, versus $21.4 billion the same time last year.

Revenue fell short of Bloomberg market expectations for US$22.3 billion.

Earnings notched US$1.45/share for the period ending May 3, with analysts forecasting US$1.20/share.

The news comes as Dell seeks to further synchronise business units, with its new offering providing clients corporate PCs with a mix of Dell services and VMware software.

The company has sought to foster customer demand across business units, driving higher sales and profit for its lower-margin hardware division.

According to Taiwanese trade publication, DigiTimesDell’s gaming division has continued to go from strength to strength, with its gaming notebooks accounting for 10% of global PC market in 2018.

Contrasting previous periods, Dell’s server and networking sales slipped 8.8% in the quarter.

PC revenue soared 6.2% during the period to US$10.9 billion, with corporate sales jumping 13% from subscription services.

Demand also accelerated from more companies upgrading PCs to Windows 10.

The company’s infrastructure business division sales (e.g. servers and storage hardware) dipped 5% to US$8.2 billion.

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