Dell Technologies Inc. enjoyed another strong quarter as it beat expectations thanks to high demand for personal computers and other equipment that enables remote work.

The company reported its fiscal fourth-quarter financial results today, posting a profit before certain costs such as stock compensation of $2.70 per share on revenue of $26.11 billion, up 9% from the same quarter last year.

The results crushed Wall Street’s expectations. Analysts had forecast a profit of just $2.14 per share on revenue of $24.9 billion.

Dell, led by founder and Chief Executive Officer Michael Dell (pictured), is benefiting from the fact that more people are working and studying at home than ever before during the coronavirus pandemic, leading to much higher PC and laptop sales over the last year.

“In the past year, our team rallied to support our customers and partners worldwide as technology played a central role in keeping our society, economy and lives moving forward,” said Jeff Clarke, chief operating officer at Dell Technologies.

For the full year, Dell reported a profit of $4.22 per share on revenue of $94.22 billion, up 2% from a year ago. It added that it sold 50.3 million PCs and laptops throughout the year.

During the quarter, Dell’s PC unit pulled in revenue of $13.8 billion, up 17% from the same period one year ago. Commercial and consumer revenue surged, and operating income for the quarter came to $1 billion. For the full year, the PC business delivered total revenue of $48.4 billion with operating income of $3.4 billion.

Dell isn’t the only PC maker that’s benefiting from this trend. HP Inc. also posted strong results today, with first quarter earnings and revenue that topped expectations. HP said its PC sales rose 7% year-over-year as revenue topped $10.6 billion.

“Dell had a fantastic Q4, increasing revenue 9% in a very uncertain time,” said Moor Insights & Strategy analyst Patrick Moorhead. “The PC group led the revenue (+17%) and operating income ($1 billion) driven by consumer (+19%) and commercial (+16%) personal computers. I am pleased to see growth in the consumer space this quarter as last quarter it was all about commercial growth.”

PCs are only a part of Dell’s story. The company also sells huge amounts of data center infrastructure to enterprises in the shape of computer servers, storage and networking gear. The Infrastructure Group’s results were a bit more mixed, however.

Revenue in the fourth quarter was flat at $8.8 billion. Dell said that within this division, its storage revenue was down 2%, while server and networking sales were up 3%. Operating income for the quarter came to $1.2 billion. For the entire year, the infrastructure business reported total revenue of $32.6 billion and operating income of $3.8 billion.

Moorhead’s colleague Steve McDowell said he’s optimistic about the state of Dell’s infrastructure business despite the mixed results. He told SiliconANGLE that from a total revenue perspective, there are strong indications of a recovery in storage.

“While Dell declined slightly year-over-year in both servers and storage, it was its strongest quarter of the year, up nearly 13% sequentially,” he said, noting that “we saw similar from both NetApp and Pure Storage.”

McDowell said he saw a number of bright spots in Dell’s storage business, with its midrange PowerStore line seeing strengthening demand, growing fourfold in the quarter compared with the last. “Dell continues to have one of the most competitive storage portfolios in the market, and we’re seeing traction in the right places,” he said. “I’m not worried about Dell’s performance in 2021.”

Dave Vellante, chief analyst at SiliconANGLE sister market research firm Wikibon, said Dell had knocked it out of the park, doing a great job of everything it said it would do this quarter. “Last September, said would pay down debt, gain share, and the like, and they’ve executed extremely well, especially given that the infrastructure business is in the tank,” he said.

Dell’s results were further bolstered by VMware Inc., the data center virtualization software giant that’s majority-owned by Dell. VMware also topped expectations during the quarter with sales of $3.3 billion. That comes despite VMware being leaderless ever since its CEO Pat Gelsinger stepped down to take over the reins at Intel Corp. earlier this year. VMware failed to provide an update on its CEO search.

The future of VMware itself also remains uncertain. Last year, Dell said it was considering plans to spin off VMware as an entirely separate company, but it said it will delay making a decision on that until after September 2021.

Vellante said the biggest challenges for Dell now are, in the short-term, figuring out what to do with VMware, and longer-term, building a software-as-service cloud together atop the public clouds.

Photo: SiliconANGLE