Dell Parent Denali Reports Sales Decline -- Update

By Lisa Beilfuss 

Dell Inc.'s parent company Denali Holdings on Friday reported fiscal first-quarter sales that slipped from a year earlier as the company is in the midst of closing its deal to buy EMC Corp.

Sales fell 2.4% from a year earlier, to $12.53 billion, driven by a decline in revenue from the company's client and enterprise groups, and flat Dell software sales. The company had forecast revenue of $13.2 billion last month and lowered its estimate last week.

Dell in October unveiled a cash-and-stock deal to buy data-storage company EMC in what is the biggest-ever merger in the technology industry. On Wednesday, The Wall Street Journal reported Dell was set to sell $3.25 billion in debt as part of its effort to finance the transaction.

In its latest quarter, Denali booked $90 million in costs classified as "other corporate expenses," a bucket that includes merger-and-acquisition related charges. That was up from $36 million a year earlier.

Denali, based in Round Rock, Texas, posted an operating loss of $161 million for the quarter ended April 30, an improvement from last year's loss of $335 million. In May, the company predicted an operating loss of $100 million but said last week the loss would be wider.

The company said in March it would sell its information-technology services unit for about $3.1 billion. Because of a $481 million gain from discontinued operations, Denali reported an overall adjusted profit of $55 million. A year earlier, the company posted a loss of $504 million.

Write to Lisa Beilfuss at [e-mail]

(END) Dow Jones Newswires

June 10, 2016 17:47 ET (21:47 GMT)

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