Dell Technologies (DELL) - Get Report shares wavered after the IT giant reported fiscal first-quarter net income leaped on 12% higher revenue, with particular strength in client solutions, which includes personal desktop and laptop computers.
The figures exceeded Wall Street analysts' expectations.
For the quarter ended April 30, the Round Rock, Texas, company earned $1.13 a share compared with 19 cents a share in the year-earlier quarter. The latest adjusted earnings were $2.13 a share.
Revenue reached $24.49 billion from $21.9 billion.
A survey of analysts by FactSet produced consensus estimates of GAAP earnings of 59 cents a share, or an adjusted $1.64 a share, on revenue of $23.41 billion.
At last check Dell shares were trading down 0.9% at $98.85. They closed regular Thursday trading little changed at $99.75. They have been trading around the company's 52-week high near $104, set April 19.
The results reflect a "substantial acceleration in digital transformation" worldwide, Vice Chairman and Chief Operating Officer Jeff Clarke said in a statement.
Operating profit advanced 84% in client solutions; 8% in infrastructure solutions, which includes servers, networking and storage; and 9% at VMWare.
Revenue was up 20% in client solutions, 5% in infrastructure solutions, and 9% at VMWare.
Dell ended the quarter with performance-obligations of $42 billion and cash and investments of $15.9 billion.
The company said that in 2021 to date it has paid down $2.5 billion of debt.
It has revised its debt-paydown target for fiscal 2022 to at least $16 billion when it closes the spinoff of its 81% VMWare stake.
Last Friday on CNBC's "Mad Money" program, TheStreet.com Founder Jim Cramer told investors that "you can buy [Dell] ahead of time because [Chief Executive] Michael Dell's going to tell a fantastic story. I bet they'll have a terrific quarter."
At the beginning of December, with Dell stock around $70 a share, Cramer had advised investors to buy the stock "right here, right now."
Earlier in May, Citi resumed coverage of Dell with a buy rating and $120 price target.
Analyst Jim Suva said he didn't expect any regulatory challenges to Dell's plan to sell its Boomi cloud platform for $4 billion cash to Francisco Partners and TPG Capital.
VMWare, the Palo Alto, Calif., provider of digital infrastructure, reported fiscal first quarter net income per share rose 9.8% on 9.5% higher revenue.
Earnings were $1.01 a share compared with 92 cents in the year-earlier quarter. The latest adjusted earnings were $1.76 a share. Revenue advanced to $2.99 billion from $2.73 billion
A survey of analysts by FactSet produced consensus estimates of GAAP earnings of 86 cents a share, or an adjusted $1.59 a share, on revenue of $2.94 billion.
At last check VMWare shares were unchanged at their close of regular Thursday trading, $161.21.