The PC maker is seeing declining demand across industries in China amid an escalating Sino-US trade war, but the company’s focus on selective large deals in the Asian country helped it earn “higher-margin dollars” in a slow market.
That helped the company forecast full-year adjusted earnings per share in a range of $6.95 to $7.40, above analysts’ estimate of $6.42.
The company said it was working to raise prices of products including desktops and workstations to offset the impact of additional five percent tariffs from 1 Sept on Chinese goods.
“Our costs are going to go up and we will have to move price”, Chief Operating Officer Jeffrey Clarke said on a conference call with analysts.
Sales fell seven percent in the company’s servers business to $8.6 billion, but operating income rose four percent to $1.05 billion.
Dell said server orders outside China were up a percent in the second quarter and the company expects to gain market share in the current quarter in North America, and Europe, the Middle East and Africa.
The company reported a six percent jump in revenues in its client solutions business, which makes desktop PCs, notebooks and tablets, and branded peripherals. Operating income in the unit more than doubled to $982 million.
Dell is benefiting from an increase in sales of workstations to corporations and higher-end personal computers for gaming.
Dell posted net income of $4.51 billion for the second quarter compared with a loss of $461 million a year earlier.
Excluding items, the company earned $2.15 per share, above the average analyst estimate of $1.47 per share.
Total revenue rose two percent to $23.37 billion, beating the average analyst estimate of $23.24 billion.