Dell missed Wall Street’s revenue estimates for its third quarter, as consumer PC revenue dropped 6% from last year.
But the company blew away earnings estimates in spite of the weak sales, showing once again how Dell is great at squeezing more profit out of less.
Revenue was $15.37 billion, down slightly from last year and behind consensus estimates of $15.65 billion.
One big reason for the shortfall was weak consumer revenue, which was down 6% from last year at only $2.8 billion. Public sector revenue dropped as well, falling 2% to $4.4 billion. Enterprise and small-medium business spending was up.
But Dell managed to turn that weak revenue into a 9% EPS gain from last year, at $0.54 (non-GAAP). The average estimate was $0.48.
Investors know this “more from less” performance can’t continue forever, and sent the stock down about 1% after hours.
Dell now says that fiscal year revenue growth will be lat the “lower end of the range of its revenue outlook of 1 to 5-per cent,” causing investor Paul Kedrosky to quip “mortuaries more of a growth business than are PCs.”