Dell and VMware revenues boosted by remote working

Online learning and working from home helped both firms beat analyst expectations

Dell Technologies beat profit estimates with strong second-quarter earnings boosted by demand for its notebooks and software products for remote and online learning. 

The firm posted second-quarter revenues of $22.7 billion (£17 billion) and operating income of $1.1 billion (£827 billion), a 119% increase year-on-year. 

While the impact of the coronavirus, and the resulting lockdown, hurt other parts of its business, the rapid shift to the cloud spurred demand for hardware and software to enable remote working.

Orders from the education sector jumped 24% in the second quarter period ending 31 July, according to Dell, while government orders also increased by 16%.

"In Q2, we saw strength in the government sector and in education as parents, teachers and school districts prepare for a new frontier in virtual learning," said Jeff Clarke, chief operating officer at Dell. 

Revenue in the firms biggest segments was also boosted by consumer sales of notebooks and gaming systems hitting double digits. Data centre sales, were down, however, dropping 4.8% to $8.21 billion (£6.18 billion), which Dell said was due to companies redirecting their spending towards remote working.  

Dell's software unit, VMware, also benefited from the shift to cloud, posting a 9.7% revenue rise at $2.91 billion (£2.18 billion). 

"In light of these uncertain times, we delivered solid execution and financial performance in Q2 FY21," said Pat Gelsinger, VMware CEO.

"With our Any Cloud, Any Application, Any Device strategy, we are helping customers solve their hardest technology challenges and meet and exceed their business objectives."

Dell's stake in VMware is worth almost $50 billion (around £40 billion), but the company is reportedly exploring a potential spinoff of its equity ownership of the software giant. Any potential deal is likely not to occur before September next year, but Dell has confirmed the plans by submitting a filing with the US Securities and Exchange Commission (SEC).

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