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Dell Stock Falls On Mixed Q3 Results

Dell Technologies’ (DELL) stock is down 6% after the personal computer (PC) manufacturer posted mixed third-quarter financial results.

The company announced earnings per share (EPS) of $1.88 U.S., which was well above the Wall Street consensus of $1.46 U.S. per share.

However, Dell’s revenue came in at $22.3 billion U.S., down 10% from a year ago and below the $23 billion U.S. that analysts had forecast.

Profits were helped by a shift to the company’s higher-margin enterprise hardware products and lower component costs, said the company.

Revenues were hurt by ongoing weakness in corporate PC demand. Dell executives said that they expect a rebound in corporate PC sales globally over the coming year.

Revenue in the company’s Client Solutions Group that includes its PC sales declined 11% in the latest quarter to $12.3 billion U.S., while commercial client revenue was $9.8 billion U.S, below the $10.4 billion U.S. forecast on Wall Street.

Dell said revenue at its Infrastructure Solutions Group, which includes servers, networking, and storage hardware, totaled $8.5 billion U.S., which was ahead of consensus expectations of $8.3 billion U.S.

The company said backlog for artificial intelligence (A.I.) optimized servers doubled sequentially in the quarter. Dell said it shipped over $500 million U.S. of A.I.-optimized severs in the quarter.

Looking ahead, Dell said it expects revenue of $21.50 billion U.S. to $22.50 billion U.S. for the current quarter, below consensus estimates of $23.97 billion U.S.

The company forecast profits of $1.70 U.S. per share for this quarter, below the $1.82 U.S. that analysts had penciled in.

Dell bought back $744 million U.S. of its own stock in the previous quarter.

Shares of Dell Technologies have risen 86% this year. Prior to today (Dec. 1), the company’s stock was trading at $75.87 U.S. per share.