Dell Technologies Inc beat Wall Street profit estimates on Thursday, helped by higher demand for desktops, as well as a focus on more profitable contracts within its server unit in China. The PC maker is seeing declining demand across industries in China amid an escalating Sino-US trade war, but the company's focus on selective large deals in the Asian country helped it earn "higher-margin dollars" in a slow market.
That helped the company forecast full-year adjusted earnings per share in a range of $6.95 to $7.40, above analysts' estimate of $6.42, according to IBES data from Refinitiv.
Sales fell 7% in the company's servers business to $8.6 billion, but operating income rose 4% to $1.05 billion. The company reported a 6% jump in revenue in its client solutions business, which makes desktop PCs, notebooks and tablets, and branded peripherals. Operating income in the unit more than doubled to $982 million.
Dell is benefiting from an increase in sales of workstations to corporations and higher-end personal computers for gaming. Dell posted net income of $4.51 billion for the second quarter ended August 2, compared with a loss of $461 million a year earlier. Excluding items, the company earned $2.15 per share, above the average analyst estimate of $1.47 per share. Total revenue rose 2% to $23.37 billion, beating the average analyst estimate of $23.24 billion.