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Dell Inc. on Monday disclosed quarterly financial results for the first time since late 2013, when the company reverted from public to private ownership.

The disclosure, which appeared in a regulatory filing to the Securities and Exchange Commission by Dell Holding Inc., owner of Dell Inc., underlines a major question in Dell's blockbuster $67 billion bid to acquire EMC Corp.: how the computer maker would pay off the massive debt it must take on to buy the storage company.

The deal, announced in October, would create a corporate-computing giant by combining Dell's PC and server sales, primarily to consumers and small to medium-size businesses, with EMC's storage business, which focuses on large corporations.

Dell's results show the company facing the same pressures as rivals such as International Business Machines Corp. and the former Hewlett-Packard Co., which in November split into separate corporate-computing and PC-and-printer companies.

Dell saw revenues decline by 6% year on year to $14 billion in its quarter ended in July. Unlike those competitors, however, Dell's revenues were up in the company's fiscal year ended January 2015, rising 5%.

"Dell has executed well. We've invested wisely to drive future growth, and we're pleased with our performance," said David Frink, a company spokesman.

Dell has paid off $4.5 billion in debt over the past two years, but those payments left the company with less cash than it had when it traded publicly, and the move to private management hasn't boosted profits.

During Dell's fiscal 2015, the company's operating profit totaled $3.2 billion excluding charges. In 2013, that figure was $4 billion.

"These numbers reinforce that it's going to be a highly leveraged transaction," said Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co. He believes that Dell will assume a sizable $51 billion in debt to conclude the deal.

"It's no surprise that they're looking to try and sell some assets," he added.

Earlier this year, Dell filed for an initial public offering of its SecureWorks division, a business that could be worth as much as $2 billion. The company is contemplating roughly $10 billion in further divestitures that could include its IT services business, as first reported by the technology website Re/Code and confirmed by a source familiar with Dell's plans. Other possible asset sales include operations of previous Dell acquisitions Boomi Inc., Quest Software Inc., and SonicWall Inc.

EMC could sell its RSA Security LLC division to reduce the deal's size, said Daniel Ives, an analyst with FBR & Co.

Other tactics to lighten the debt load haven't worked out so well. EMC on Monday scrapped plans to merge Virtustream, a cloud computing division, with parts of VMware, a publicly traded EMC subsidiary. The deal—which was roundly disliked by VMware investors—could have freed up cash for the combined Dell and EMC by shifting to VMware some capital costs of building Virtustream's servers and data centers.

The filing shows that the combined Dell and EMC would have free cash flow of around $7 billion, enough to give some reassurance to investors worried about the debt, according to Mr. Ives.

"Relative to the Dell piece, I think it shows pretty good stabilization," he said. "I think they've done a commendable job on profitability and the all-important free-cash-flow metrics."

There may be other stumbling blocks ahead, however. Aside from regulatory and antitrust hurdles, shareholders have filed 13 class-action lawsuits against the companies and directors involved in the deal, and the Internal Revenue Service could hit Dell with an unexpected tax bill over its issuance of a VMware tracking stock, according to the filing.

One major roadblock in the rearview mirror, though: A "go shop" provision that allowed EMC to seek out other suitors expired on Saturday. EMC shareholders may vote on the deal as soon as next summer.

Write to Robert McMillan at Robert.Mcmillan@wsj.com

(END) Dow Jones Newswires

December 14, 2015 19:05 ET (00:05 GMT)

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