Shares of Dell Technologies plummeted Friday after the computer hardware giant missed earnings expectations for its fiscal fourth quarter. Dell stock dropped even though the company beat Wall Street's sales target, thanks to record PC shipments.
The Round Rock, Texas-based company late Thursday said it earned an adjusted $1.72 a share on sales of $27.99 billion in the quarter ended Jan. 28. Analysts had expected Dell earnings of $1.95 a share on sales of $27.5 billion, according to FactSet. On a year-over-year basis, Dell earnings fell 2% while sales grew 16%.
Dell blamed a higher-than-anticipated effective tax rate for the lower-than-expected earnings. It also faced supply chain issues, including higher component and logistics costs.
Revenue in Dell's PC unit increased 26% year over year to $17.3 billion in the fourth quarter. Commercial PC sales surged 30% to $12.9 billion while consumer PC sales rose 16% to $4.4 billion.
Dell's Infrastructure Solutions Group saw sales rise 3% to $9.2 billion in the quarter. The unit includes servers, networking and data storage gear.
Dell Stock Retreats After Report
For the current quarter, Dell expects to earn $1.38 a share on sales of $25.1 billion. That's based on the midpoint of its outlook. Wall Street was modeling earnings of $1.45 a share on sales of $24.45 billion in Dell's fiscal first quarter.
In other news, Dell announced plans to start paying a quarterly cash dividend. The initial quarterly dividend of 33 cents a share will be payable on April 29 to stockholders of record as of April 20.
On the stock market today, Dell stock plummeted 7.8% to close at 51.46. During the regular session Thursday, Dell stock dropped 1.7% to 55.84.
Dell stock ranks second out of 13 stocks in IBD's Computer Hardware and Peripherals industry group. It has an IBD Composite Rating of 86 out of 99, according to IBD Stock Checkup.
On Nov. 1, Dell completed the spinoff of its 81% equity ownership of VMware.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
