Dell Misses on the Top and Bottom Lines

Seth Jayson, The Motley Fool
Updated

Dell (NAS: DELL) reported earnings on May 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended May 4 (Q1), Dell missed estimates on revenue and missed estimates on earnings per share.

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


Margins dropped across the board.

Revenue details
Dell recorded revenue of $14.42 billion. The 27 analysts polled by S&P Capital IQ wanted to see net sales of $14.91 billion on the same basis. GAAP reported sales were 4.0% lower than the prior-year quarter's $15.02 billion.

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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 $0.43. The 29 earnings estimates compiled by S&P Capital IQ predicted $0.46 per share. GAAP EPS of $0.36 for Q1 were 27% lower than the prior-year quarter's $0.49 per share.

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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 21.3%, 160 basis points worse than the prior-year quarter. Operating margin was 5.7%, 290 basis points worse than the prior-year quarter. Net margin was 4.4%, 190 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $14.79 billion. On the bottom line, the average EPS estimate is $0.46.

Next year's average estimate for revenue is $60.21 billion. The average EPS estimate is $1.93.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Dell is outperform, with an average price target of $18.70.

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At the time thisarticle was published 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 ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of 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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