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<\/a><\/p>\nGlobal PC shipments fell 13% in the three months from April to June – the worst quarter in more than nine years, according to Gartner Inc, an industry analyst. Much of the decline was due to the ongoing downturn in demand for Chromebooks and inflation-squeezed budgets delaying consumer purchases.<\/p>\n
Fiscal second-quarter revenue from the Infrastructure Solutions Group, which includes most of Dell\u2019s technology services, increased 12% to $9.5 billion from a year earlier. Server and networking sales climbed 16% to $5.2 billion, while storage revenue gained 6% to $4.2 billion.<\/p>\n
Investors may have been expecting Dell\u2019s infrastructure unit to beat estimates, and share gains heading into the results left little room for a rally, said Woo Jin Ho, an analyst at Bloomberg Intelligence.<\/p>\n
To emphasize the continuing slump in the PC market, Sweet said current-quarter sales in Dell\u2019s PC division are expected to decline by a \u201chigh teens\u201d percentage from the period a year ago. Revenue will increase \u201cin the low teens\u201d in the infrastructure unit, where executives \u201csee a more challenging\u201d demand environment, he said.<\/p>\n
Supply chain backlogs improved during the quarter for Dell, and backlog-clearing PC sales helped offset demand weakness, Clarke said. However, the backlog for its infrastructure unit, particularly for server components, remained elevated, and component cost inflation is expected in the third quarter, he said.<\/p>\n
Gross margins decreased 2 percentage points from a year ago to 21.4%, mainly due to expense increases and currency value changes that haven\u2019t yet been factored into product prices, Sweet said. The company slowed down external hiring as part of an effort to control costs, Sweet said.<\/p>\n
Dell ended the quarter with remaining performance obligations of $41 billion, up 2% year-over-year. Recurring revenue was $5.2 billion, a gain of 8% from the period a year earlier. The company said annual recurring revenue for APEX, its cloud management service, is now more than $1 billion.<\/p>\n
The shares fell to a low of $43.65 in extended trading after closing at $47.90 in New York. The stock has declined 15% this year.<\/p>\n
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