Computer maker Dell Technologies revealed that a shortage of chips from its main supplier, Intel Corp would affect sales for the final months of the year.
For the three months ending on November 1, Dell reported non-GAAP revenues of $22.9 billion, shy of analysts’ expectation of $23 billion. The figure represents +1% rise form the year-ago quarter.
Sales of Dell’s client solutions segment( which include it PC business) increased +4.6%.
Non-GAAP earnings of $1.75 per share exceeded analysts estimates.
However, Dell mentioned that the Intel chip shortage has worsened and is now hurting shipment forecasts for the final months of the year. Dell now expects fiscal 2020 revenues in the range of $91.5 billion to $92.2 billion, a $2 billion reduction from the higher end of its prior projection.
According to the company, other headwinds include macro conditions in China and softening client solutions demand post the Win 10 refresh.
CFO Thomas Sweet mentioned the aforementioned global challenges coupled with the Intel's supply constraints has caused the company to become cautious on fiscal 2021 growth. Sweet also indicated that they are expecting the benefit of the fiscal year 2020 component cost deflation to wane as component cost of forecast is to be inflationary in fiscal 2021.