Dell revenue grows 2% despite facing storage and server crisis

Dell Technologies revealed that its revenue rose 2 percent to $23.37 billion for the second quarter ended Aug. 2.
Dell Technologies at MWC 2017

Dell posted net income of $4.51 billion for the second quarter, compared with a loss of $461 million a year earlier.

Dell Technologies Infrastructure Solutions Group revenue fell 7 percent to $8.6 billion with operating income of $1.1 billion. Dell storage revenue was flat at $4.2 billion. Dell servers and networking revenue decreased 12 percent to $4.4 billion.

Dell Technologies Client Solutions Group revenue increased 6 percent to $11.7 billion with operating income of $982 million. Commercial revenue grew 12 percent to $9.1 billion, and Consumer revenue dropped 12 percent to $2.7 billion.

VMware revenue was $2.5 billion for the second quarter, up 12 percent driven by broad-based strength across a diverse product portfolio. Operating income for the second quarter was $762 million.

The PC maker is seeing declining demand across industries in China amid an escalating Sino-U.S. trade war, but the company’s focus on selective large deals in the Asian country helped it earn higher-margin dollars in a slow market, Reuters reported.

Dell is working to raise prices of products including desktops and workstations to offset the impact of additional 5 percent tariffs effective Sept. 1 on Chinese goods.

“Our costs are going to go up and we will have to move price,” Chief Operating Officer Jeffrey Clarke said on a conference call with analysts.

Dell said server orders outside China increased 1 percent and the US-based company expects to gain market share in the current quarter in North America, and Europe, the Middle East and Africa (EMEA).

Dell is benefiting from an increase in sales of workstations to corporations and higher-end personal computers for gaming.