Dell falls as parts shortage weighs on forecast By


© Reuters.

By Dhirendra Tripathi – Dell Technologies Inc. (NYSE:) stock fell 7.3% in premarket trading on Friday after citing tough market conditions due to a shortage of parts.

This lack of component availability led him to a disappointing forecast of $1.25 to $1.50 in adjusted earnings per share for the period ending April, down sequentially.

The company expects the PC backlog to grow in the current quarter as chips and other key components remain in short supply. It shipped 17.2 million PCs in the fourth quarter, up 9%.

Parts shortages have been a recurring problem among manufacturers of laptops, cell phones and other gadgets for over a year. While big players like Dell should now overcome the challenges, that doesn’t seem to be happening.

“We expect our ISG backlog to remain strong for at least the first half of the year as parts shortages continue,” said Vice President and Co-Chief Operating Officer Jeff Clarke. when calling for results.

The Infrastructure Solutions Group (ISG) vertical is home to the company’s server, networking and storage businesses. Business revenue rose 3% in the fourth quarter to top $9 billion.

Dell continues to fight soaring raw material and logistics costs with price hikes. Booming demand for its machines and price increases have boosted its annual revenue to more than $101 billion, a lifetime record.

Revenue at Client Solutions Group, home to its hardware business, jumped 26% to $17 billion, with demand coming from both businesses and individuals. The company said its PC business gained market share in 32 of the past 36 quarters.

rose 16% to $28 billion. Adjusted profit rose 2% to $1.4 billion.

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