In premarket trading Friday, shares of Dell Technologies Inc. (NYSE:DELL) rose 12% after the company reported higher first-quarter sales and lower operating expenses.
Dell reported first-quarter FY23 revenue growth of 15.6% year-over-year to $26.1 billion, with growth across Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG), beating the consensus of $25.04 billion.
The main element behind ISG's strength was servers and networking revenue, which was $5 billion, up 22%, and well ahead of the Street consensus of $4.3 billion. Storage revenue also topped expectations at $4.2 billion, up 9% and ahead of the consensus call of $4 billion.
The revenue beat is a welcoming sign of strong demand for business PCs and networking services amid companies upgrading their systems as workers return to the office.
"We are built to outperform, in a balanced and consistent way across the company, as our customers invest in their digital futures and choose Dell as their trusted partner." - Vice Chairman and co-chief operating officer Jeff Clarke,Tell Technologies.
Elsewhere, global shipments in the enterprise market increased 6.1% the quarter, while fiscal first-quarter revenue from consumer PCs increased 3% to $3.6 billion.
The Texas-based company said that its general, selling, and administrative expenses fell from $3.66 billion to $3.55 billion, while total operating expenses declined to $4.23 billion from $4.28 billion.
While Dell saw impressive gains, personal computer shipments across the industry declined 6.8% in the first three months of 2022, compared with the same period a year earlier.
Following the beat, JP Morgan raised its earnings estimates and reversed the estimate cuts they had previously taken on account of supply concerns.
Dell said it repurchased $1.5 billion of its common stock in the quarter, nearly 5% of its current market capitalization. Dell also paid out about $250 million in dividends.
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