Dell Meets on the Top Line, Misses Where it Counts

Dell (Nasdaq: DELL  ) reported earnings on Nov. 15. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Nov. 2 (Q3), Dell met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue contracted and GAAP earnings per share shrank significantly.

Margins dropped across the board.

Revenue details
Dell tallied revenue of $13.72 billion. The 29 analysts polled by S&P Capital IQ predicted revenue of $13.89 billion on the same basis. GAAP reported sales were 11% lower than the prior-year quarter's $15.37 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.39. The 32 earnings estimates compiled by S&P Capital IQ forecast $0.40 per share. GAAP EPS of $0.27 for Q3 were 45% lower than the prior-year quarter's $0.49 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 20.9%, 170 basis points worse than the prior-year quarter. Operating margin was 4.3%, 340 basis points worse than the prior-year quarter. Net margin was 3.5%, 230 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $14.45 billion. On the bottom line, the average EPS estimate is $0.40.

Next year's average estimate for revenue is $57.40 billion. The average EPS estimate is $1.73.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 4,075 members out of 5,780 rating the stock outperform, and 1,705 members rating it underperform. Among 1,219 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 826 give Dell a green thumbs-up, and 393 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Dell is outperform, with an average price target of $13.58.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Dell. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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