The 10-second takeaway
For the quarter ended Feb. 1 (Q4), Dell beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted. Non-GAAP earnings per share dropped significantly. GAAP earnings per share contracted significantly.
Gross margins expanded, operating margins grew, net margins shrank.
Dell reported revenue of $14.31 billion. The 23 analysts polled by S&P Capital IQ predicted sales of $14.13 billion on the same basis. GAAP reported sales were 11% lower than the prior-year quarter's $16.03 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.40. The 26 earnings estimates compiled by S&P Capital IQ predicted $0.39 per share. Non-GAAP EPS of $0.40 for Q4 were 22% lower than the prior-year quarter's $0.51 per share. GAAP EPS of $0.30 for Q4 were 29% lower than the prior-year quarter's $0.42 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 21.7%, 50 basis points better than the prior-year quarter. Operating margin was 4.9%, 10 basis points better than the prior-year quarter. Net margin was 3.7%, 110 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $13.59 billion. On the bottom line, the average EPS estimate is $0.38.
Next year's average estimate for revenue is $56.15 billion. The average EPS estimate is $1.67.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 4,042 members out of 5,743 rating the stock outperform, and 1,701 members rating it underperform. Among 1,204 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 848 give Dell a green thumbs-up, and 356 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Dell is hold, with an average price target of $12.49.
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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 position in any of the stocks mentioned. 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.