Dell sealed by the servers in 2020, sidesteps the coronavirus to 2021
Impacted by the us-china tensions and a weak demand of companies in the United States, Dell has seen its sales of servers and networking products cap to 17.1 billion usd. The firm Texan has been the impact of the Coronavirus in its forecasts.
It is a year 2020 mitigated as Dell Technologies has ended the 31 of January last. If the results of its PC business and its subsidiary VMware have been sources of growth for the group, it is quite different from its sales of infrastructure solutions. These are marketed through its division, Infrastructure Solutions Group (ISG), whose annual earnings declined by 7% to 33.9 billion usd compared to the previous 12 months. This decay lies in its entirety at the drop of 14% of the billings of servers and networking products that were not as well represented as 17.1 billion usd. Remained stable (16,8 billion usd), revenues from sales of storage solutions has not helped cushion the blow. The decline in overall earnings of the division, ISG has resulted in a decline of 4% to 4 billion$ of its operating income. Tom Sweet, the DAF of Dell, explained that the manufacturer has faced a challenging trading environment due to the tensions between China and the United States, and a decline in business investment across the Atlantic.
For its part, the division Customer solutions Group, which marketed 46,5 M€ of PCS on the calendar year 2019, has generated an annual turnover of 45.8 billion usd, up 6%. A result that is due to the good sales of professional products (+11% to 34.2 billion usd), which offset the decline of 6% of sales to the general public. The icing on the cake, the operating income for the division jumped by 60% to stand at 3.1 billion usd. Just as dynamic as the division PC of Dell, the subsidiary VMware displays a turnover in 2020 of 10.9 billion usd (+12%). Revenues on the basis of which it has reached 3.1 billion usd in operating income.
Finally, the overall turnover of Dell for the year 2020 are shown in growth of only 1% to 92 billion usd. The gross margin of the manufacturer is still comfortable (15% of sales) and allows him to reap an operating profit 10.14 billion usd (+15%). The net result of the group shows up to 6 billion usd and rose to 16%.
According to the forecasts of the manufacturer, it is expected to produce between 91.8-to 94.8 billion usd in revenue for its fiscal year 2021. They do not take into account the potential impact of the sars Coronavirus , ” too hard to quantify “, while several other major players in the IT world, come to issue warnings about results. Yet, the leaders of the manufacturer clearly indicate that the health crisis is expected to have a negative effect on the first quarter of its current fiscal year, particularly in China.