Market Commentary

Dell Falls as Outlook Implies Demand Slowdown

Huzaifa Waseem · 1 minute read

Dell Technologies (DELL:US) shares are trading modestly lower in recent days after the IT giant offered a worse-than-expected forecast amid weakening demand for PCs.

Dell initially reported fourth-quarter results that came ahead of the consensus. Adjusted net revenue topped $25 billion, easily ahead of the consensus at $23.43 billion. Adjusted earnings per share were reported at $1.80, up from the $1.72 reported for a year-ago period and $1.64 that analysts were expecting.

“We returned approximately $3.8 billion of capital to our shareholders in FY23 and are increasing our annual dividend by 12% in FY24, reflecting our confidence in our long-term business model and ability to generate and grow our cash flow over time,” CFO Tom Sweet said.

While the stock responded positively to results, it then reversed gains to close lower on the week after the management issued a forecast during the earnings call. Dell’s projections for the full-year revenue and EPS were 5% and 16% below consensus.

“Given the demand trends we saw last quarter, we expect Q1 revenue to be seasonally lower-than-average, down sequentially between 17% and 21%, 19% at the midpoint,” Sweet said on the call.

Turning to Capitol Trades’ data, we see that Representative Ro Khanna was actively trading DELL stock in 2022, mostly buying shares. His most recent trades were completed in November last year, when the stock was trading around $37 apiece.

Dell shares closed at $39.07 on Monday and are down about 4.47% year-to-date.