Dell quarterly revenue edges past estimates on remote work boost

Aug 27 (Reuters) - Dell Technologies Inc posted a smaller-than-expected drop in quarterly revenue on Thursday, as weakness in its data center segment was cushioned by robust demand for its notebooks and software products for remote work and online learning.

The COVID-19 pandemic has led to a rapid shift to cloud, spurring demand for products that allow organizations to carry on, even as millions of people around the globe work from home to stay safe, and schools to hold virtual classes.

Orders for Dell from the education sector jumped 24% in the second quarter ended July 31, and government orders rose 16%.

The company also saw an uptick in demand for its gaming systems, including Alienware as more people turned to gaming during stay-at-home orders.

Revenue from the company’s biggest segment that includes desktop PCs, notebooks and tablets fell 4.6% to $11.20 billion, and data center sales dropped 4.8% to $8.21 billion as companies directed their spending towards remote work, Dell said.

Its software unit VMware, which has directly benefited from the shift to cloud, posted a 9.7% rise in revenue to $2.91 billion. Dell said in July it was planning to spin off its 81% stake in the unit.

The company’s total revenue slid 2.7% to $22.73 billion from a year earlier, but edged past analysts’ average estimate of $22.52 billion, according to IBES data from Refinitiv.

Net income fell to about $1.10 billion, or $1.37 per share, from $4.23 billion, or $4.47 per share. (Reporting by Neha Malara in Bengaluru; Editing by Shinjini Ganguli)