Dell Technologies Inc., issuing a forecast for the first time since re-entering the public markets in December, said sales growth will slow over the next year, signaling that global economic struggles may dent corporate demand for the hardware giant’s products. Although Dell doesn’t break out ecommerce sales, it has long conducted much of its sales through B2B and retail ecommerce sites.

In fiscal 2020, Revenue will be $92.7 billion to $95.7 billion in fiscal 2020, Tom Sweet, chief financial officer, said Thursday on a conference call with analysts. That suggests sales growth of 2.3 percent to 5.6% compared with fiscal 2019, when the company’s revenue jumped 15%. Annual profit, excluding some costs, will reach $6.05 to $6.70 per share.

For the fiscal year ended Feb. 1, Dell said revenue was $90.6 billion, up 15% from the prior year. The company reduced its operating loss by 92% to $191 million, and generated a non-GAAP operating income of $8.9 billion, up 14% over the prior year.  Cash flow from operations was $7.0 billion. During the year, net loss decreased 25% to $2.1 billion.

For the fiscal fourth quarter, revenue was $23.8 billion, up 9%. During the quarter, the company generated operating income of $331 million¹, versus an operating loss of $69 million in the fourth quarter of the prior year. Fourth quarter non-GAAP operating income was $2.7 billion.  Cash flow from operations was approximately $2.4 billion.

Helping with digital transformation

“Our focus is enabling customers to digitally transform and drive their businesses forward,” Sweet said on the conference call, according to a transcript from Seeking Alpha.

CEO Michael Dell’s technology empire generated consistently strong hardware sales over the last year amid the company’s transition back to the public markets after five years of being private. The move was meant to simplify a tangled corporate structure and give Dell more flexibility to pay down its massive debt. The company said it paid down about $200 million in gross debt in the three-month period ended Feb. 1.

Analysts and investors have raised concerns that technology companies relying on hardware, such as Dell, may be affected by a global economic slowdown. Server rival Hewlett Packard Enterprise Co. last week reported falling revenue because of weaker demand.

But Sweet said Dell’s revenue in the current year will reflect more typical demand compared with the booming performance in fiscal 2019.

“We’re expecting more normalized growth this year versus what we saw in fiscal 2019, which was a strong market and a strong investment cycle,’’ he said in an interview.

Annual operating income, excluding some expenses, is projected to be $9 billion to $9.6 billion. Adjusted revenue will be $93 billion to $96 billion.

Dell’s shares were little changed in extended trading after closing at $55.82 in New York. The stock has gained about 25 percent since the company became public again.

Earlier, Dell reported revenue of $23.8 billion in the fiscal fourth quarter, compared with $21.9 billion a year earlier. Sweet pointed to consistent sales “and profitable share gains” across the major business units.

“Dell is in a market that everyone says is a dinosaur,’’ said Glenn O’Donnell, an analyst at Forrester Research Inc. “If you don’t execute well, yes it is. But Dell is executing well. ”

Growth in infrastructure sales

The quarterly loss widened to $287 million, under traditional accounting rules, from $133 million a year earlier, the Round Rock, Texas-based company said in a statement. Adjusted earnings before interest, taxes depreciation and amortization gained 11 percent to $3 billion. Dell didn’t report earnings per share because the transaction that brought it back to the stock market occurred in the middle of the quarter, complicating the company’s share count.

Sales in Dell’s infrastructure business unit, which includes servers and storage hardware, gained 10% to $9.9 billion in the period, led by a 14% increase in server sales. Revenue from the personal computer unit grew 4% to $10.9 billion, with corporate PC sales growing 9% and revenue from consumer PCs falling 6%. Dell notches a higher profit margin from corporate devices.

Dell also reported adjusted revenue of $24 billion in the quarter. Both reported revenue figures were in line with analysts’ average estimate, according to data compiled by Bloomberg.

VMware Inc., a publicly traded software maker that’s majority owned by Dell, reported sales that rose 17% in the most recent period to $2.6 billion, which was ahead of the $2.5 billion average estimate of analysts polled by Bloomberg. Profit, excluding some items was $1.98 per share, above the $1.88 average estimate.

The maker of software used by many companies to cut costs and consolidate corporate network workloads is trying to carve out a role as more companies move to the cloud through a partnership with Amazon Web Services and increasing support for Microsoft Corp.’s rival Azure cloud.

VMware shares rose about 3% in extended trading after closing at $171.81 Thursday. The company’s stock has gained 25% this year.

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