Earnings Results: Dell stock sinks as the end of the PC boom finally lands on its top line

by | Aug 25, 2022 | Stock Market

Dell Technologies Inc. had largely avoided the effects of the end of a boom in personal-computer sales, until Thursday. Dell
shares sank more than 8% in after-hours trading after executives said that the end of the pandemic-era PC sales boom had finally showed up in the second quarter. Dell reported PC revenue of $15.5 million, which was 9% higher than last year’s total but still short of analysts’ average expectation of $15.6 million, and led to an overall revenue miss.

Other PC manufacturers such as HP Inc.
and Apple Inc.
had already signaled that demand is slipping for PCs, but Dell executives had been much more optimistic as their quarterly sales continued to gain and the company seemingly took market share. Executives changed their tune Thursday, however. For more: PC industry suffered worst decline in years during second quarter “Since we last spoke in late May, our view of the demand environment through the back half of FY23 has changed,” co-Chief Operating Officer Jeff Clarke said in comments prepared for a conference call later Thursday. “The demand environment slowed and pushed to the right over the course of the quarter, particularly in [Client Solutions Group]. We saw a decline in PC demand as we went through the quarter with higher [average selling prices] partially offsetting a unit decline.” “The Q2 and second-half macro dynamics have become more challenging as customers are taking a more cautious view of their needs given the uncertainty,” Clarke added. “We have responded swiftly by managing inventories down and reducing our expenditures.” Chief Financial Officer Tom Sweet, in what passed for a financial forecast in Dell executives’ …

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