Dell Technologies Inc. (NYSE: DELL) will release its earnings results for the quarter ended July 2021 on August 26, 2021. Earnings are expected to increase in higher revenue.
The company benefitted from robust demand for PCs from students and workers working from home during the COVID-19 pandemic offset by low demand from corporate customers due to the pandemic-triggered recession. As a result, the company's CEO is looking to shift the company's overreliance on hardware sales to subscription-based services sellers. For now, the company still depends on PC sales from almost 50% of its revenue.
Supply constraint affecting CSG
Stockearning’s Estimated EPS for the current quarter is $2.04. Historical EPS Performance in the past 12 quarters has seen the company beat estimates in eight (66%) and matched the estimate once (8%). In the last quarter, the earnings estimate was $1.55, but Dell Technologies reported earnings of $2.13 per share.
In Q1 2022, the company reported revenue of $24.5 billion, beating estimates of $23.4 billion with earnings of $2.13 per share, a 59% YoY increase. For Q2 2022, the company expects 6% sequential revenue growth. But considering supply constraints affecting the Client Solutions Group and VMware guidance, the company anticipates revenue to be marginally below the normal sequential pattern of past quarters.
Dell shares 51% likely to drop
Since the last earnings release, Dell Technologies shares have dropped 1.2%. In the previous 27 quarters, shares were DOWN 14 times following earnings release. As per Stockearning’s algorithm, the first day predicted move following earnings release is 4%, while the predicted move on the seventh day is 5%.
The next day's trading volume is around 33 million. Still, if the trading volume in extended hours is below 50%, if the following day volume, then chances are high the stock will be moving in the same direction in regular trading.
Evercore ISI gives Dell Outperform rating
Ahead of the earnings release Evercore ISI analyst Amit Daryanani added the company to their Tactical Outperform List. Daryanani stated that he expected Dell Technologies to report considerable upside in the results to estimates. Although current Street middles indicate sub-seasonal Q0Q growth, the analysts see potential for upside considering the exceptional execution in Storage and PCs end markets. In a note to investors, Daryanani stated that IDC data shows strong PC market demand, and the analyst restates his Buy rating in the stock with a price target of $110.
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