Dell sees sales above estimates on booming demand for remote-work tools

Dell Technologies Inc forecast current-quarter sales above market expectations as a pandemic-driven shift to remote work and learning powered demand for its desktops and notebooks, helping it post a surprise rise in third-quarter revenue.

The company said, on an earnings call with analysts on Tuesday, that it expects fourth-quarter revenue to rise 3% to 4% sequentially, implying a range between $24.18 billion and $24.42 billion, compared with analysts' average expectation of $23.09 billion.

The PC maker's shares were last up marginally in volatile after-market trading, as adjusted earnings matched Wall Street expectations of $2.03 per share.

Consumers and businesses are spending on notebooks at a rate Dell has not seen in over a decade, according to an earnings presentation, helping its client solutions group rake in a record $12.29 billion in revenue, up about 8% from a year earlier.

Global shipments in the traditional PC market, which includes desktops, notebooks, and workstations, jumped 14.6% year-over-year to 81.3 million units in the third quarter of 2020, according to data from IDC.

While the health crisis lifted demand for Dell's remote workstation products, the company's data center business remained under pressure, with revenue from the unit falling about 4% to $8.02 billion in the quarter.

Sales at VMware Inc rose about 8% to $2.89 billion. Dell plans to spin off its 81% stake in the software unit to help reduce debt.

Total revenue rose nearly 3% to $23.48 billion in the three months ended Oct. 30, while analysts had estimated a drop of 4.4% to $21.85 billion, according to IBES data from Refinitiv.

Net income attributable to the company rose to $832 million, from $499 million a year earlier.