Dell Parent Denali Reports Sales Decline -- Update
June 10 2016 - 06:02PM
Dow Jones News
By Lisa Beilfuss
Dell Inc.'s parent company Denali Holdings on Friday reported
fiscal first-quarter sales that slipped from a year earlier as the
company is in the midst of closing its deal to buy EMC Corp.
Sales fell 2.4% from a year earlier, to $12.53 billion, driven
by a decline in revenue from the company's client and enterprise
groups, and flat Dell software sales. The company had forecast
revenue of $13.2 billion last month and lowered its estimate last
week.
Dell in October unveiled a cash-and-stock deal to buy
data-storage company EMC in what is the biggest-ever merger in the
technology industry. On Wednesday, The Wall Street Journal reported
Dell was set to sell $3.25 billion in debt as part of its effort to
finance the transaction.
In its latest quarter, Denali booked $90 million in costs
classified as "other corporate expenses," a bucket that includes
merger-and-acquisition related charges. That was up from $36
million a year earlier.
Denali, based in Round Rock, Texas, posted an operating loss of
$161 million for the quarter ended April 30, an improvement from
last year's loss of $335 million. In May, the company predicted an
operating loss of $100 million but said last week the loss would be
wider.
The company said in March it would sell its
information-technology services unit for about $3.1 billion.
Because of a $481 million gain from discontinued operations, Denali
reported an overall adjusted profit of $55 million. A year earlier,
the company posted a loss of $504 million.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
June 10, 2016 17:47 ET (21:47 GMT)
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