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Dell reports lower than forecasted revenue as demand in Chinese market slows

Dell technologies

Date: 31st May 2019

Dell technologies posted a revenue figure for its server business which was smaller than its forecasted figure for Q1 of this year. The lower figure was due to the slowing Chinese market due to its economic conditions.

The lower demand in China is mostly due to the trade tensions between the Asian country and the United States. Not only the tech industry, but various other industries are also facing lower demand.

In the first quarter, the revenue from the server business amounted to $4.18 billion which was 8.8 percent lower. As per FactSet, the estimated revenue of Dell’s Infrastructure Solutions Group was $8.94 billion. However, the actual revenue figure was 5 percent lower at $8.20 billion.

The trade battle between the United States and China may result in additional tariffs on imports and exports. Dell has been planning for the same. It concluded that the upcoming tariffs may include devices like monitors and notebooks. Therefore, the tech company is modifying its supply chain accordingly.

While some sections of the markets did slow down, the total revenue of the company rose to $21.92 billion in the three month period ending on 3rd May. The quarter showed a 2.6 percent increase in total revenue. However, the adjusted revenue was still lower than the revenue expected by analysts which was $22.24 billion. The actual adjusted revenue was $21.99 billion.

There were other businesses of Dell which experienced an increase in revenue. For instance, revenue generated from commercial customers rose by 13 percent. However, the increase was not enough to compensate for the decline in demand in the Chinese markets for Dell servers.

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