Dell Helped by EMC Merger As Sales Increase

One year after the historic merger with EMC, Dell Technologies is showing that indeed bigger is better.

The company posted a surge in the demand for its servers, computers and networking equipment and signed 10,000 new business clients over the last year.

On Thursday, it made an announcement about a deal to become the primary supplier of IT infrastructure for General Electric, in one of the largest contracts ever for Dell that is not government related.

Sales for its fiscal second quarter increased 48% from the same period one year ago and prior to the tie up with EMC, and 8.3% from its previous three month period. Its operating losses narrowed as well.

Michael Dell has put together a huge company to push back against the increased demand for providers of cloud services like Microsoft Corp and Amazon.com.

The EMC deal brought together the leader in providing key products for computer storage and a top maker of personal computers and servers, giving Dell the opportunity to become a one-stop shopping destination for business clients and take on the competition of its rivals in the cloud industry.

At this time, Dell is making investments in new products as well as partnerships to entice money away from its encroaching rivals while at the same time keeping its traditional rivals, like Hewlett Packard at bay.

CFO Tom Sweet said that the company must continue executing and improving, but the thesis that the company has put together about why they needed to do the EMC deal has held true.

During the August 4 ending quarter, sales at Dell were $19.3 billion with an operating loss that narrowed to $979 million. For the previous three-month period, Dell sales were $17.8 billion with a $1.5 billion operating loss.

The Dell unit that has computers ended with revenue at $9.9 billion which was a 7% increase from the same period one year ago, as it enjoyed an increase in operating income. That was the highest sales quarter in that group since the 2015 fiscal second quarter.

The group that includes storage and servers ended with sales at $7.4 billion and $430 million in operating income. Networking and serving revenue reached $3.7 billion, which was 16% than the same period last year.

Results in storage were not quite as strong. Orders during the recently ended quarter for the business declined, but there is hiring currently going on for hundreds of sales specialists to help bolster its results.

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