Coronavirus ‘Uncertainty’: Dell, VMware Pull Financial Guidance

Dell Technologies initially provided full fiscal year revenue guidance of between roughly $92 billion and $95 billion, while VMware expected to generate sales of more than $12 billion for its fiscal year. Coronavirus has forced both companies to pull those figures.

Dell Technologies and VMware are withdrawing their initial fiscal year 2021 guidance because both are “unable to predict the extent” of how much the coronavirus could “adversely impact” business, according to two separate filings with the U.S. Securities and Exchange Commission.

“They both gave their full year guidance last month. America has since closed,” said one CTO from an all-in Dell Technologies and VMware channel partner. “This isn’t too concerning to us. I’m not too worried about Dell or VMware’s financial or business future. Dell sells PCs, work-from home products that we’re selling to customers as we speak. Our VMware customers still need VMware, that isn’t going away. I think both companies’ employees are kind of ahead of the curve when it comes to working from home. … It’s uncertain times for sure but I have faith that Dell and VMware can come out of this.”

In February, Round Rock, Texas-based Dell provided full fiscal year 2021 revenue guidance of between roughly $92 billion and $95 billion and operating income of $3.4 billion to $4 billion. For its full fiscal year 2020, which ended in February, Dell generated $92.2 billion in sales with $2.6 billion in operating income. In terms of its Client Solutions Group -- which includes PCs, monitors, notebooks and workstations that are currently in high demand due to coronavirus -- Dell reported record revenue in fiscal year 2020 of nearly $46 billion, up 6 percent compared to fiscal year 2019.

[Related: Michael Dell On Coronavirus: ‘Customers And Partners Need Us More Than Ever’]

Dell has now pulled its fiscal year 2021 guidance saying the global COVID-10 pandemic could “adversely impact its business operations, financial performance and results of operations” for its current fiscal year that ends February 2022. However, Dell did not provide a new fiscal year 2021 revenue guidance.

“While the Company currently is seeing heightened interest in work from home solutions and continuing execution in its global supply chain, and remains confident in its liquidity position, the Company is unable to predict the extent to which the global COVID-19 pandemic may adversely impact its business,” said Dell in a SEC filing on March 26. “As a result of the rising level of uncertainty resulting from the pandemic, the Company has determined to withdraw its previously issued full year fiscal 2021 financial guidance.”

Last month during VMware’s quarterly earnings conference, the virtualization superstar – which is majority owned by Dell Technologies – forecasted revenue for its current full fiscal year 2021 at just over $12 billion.

In a separate SEC filing on March 26, VMware said it was pulling its full year guidance because of coronavirus. “VMware is unable to predict the extent to which the global COVID-19 pandemic may adversely impact its business operations, financial performance and results of operations.,” said VMWare in its SEC filing. Similar to Dell, VMware did not provide new full year guidance numbers.

Both Dell and VMware said they would provide more information during their upcoming quarterly earnings report slated for May.

Dell’s stock is currently down 7 percent Friday afternoon to $39.32 per share. VMware’s stock is also down 7 percent at $115.52 per share.

Dell Technologies is providing millions of dollars to fight the coronavirus on several fronts. The $92 billion company is donating IT infrastructure valued at more than $850,000 to the Hubei Center for Disease Control and Prevention (CDC) in China to help upgrade their technology to enable the center to respond to the epidemic more effectively. Dell is also setting aside $3 million in funds and technology to help “meet the greatest needs of our communities and front-line organizations” working to treat and contain coronavirus across the globe.

“We must protect each other and especially our most vulnerable – our elderly and those with underlying conditions,” said Dell CEO and founder Michael Dell in a blog post. “At the same time, we are managing the impact on our own business and supply chain operations, so we can take care of you. Whether enabling a remote workforce, ensuring business continuity, powering the technology for infectious disease prevention and control, or providing simple, human advice, support and friendship – we are here to help.”

VMware CEO Pat Gelsinger said the coronavirus pandemic is the “black swan” event that changes the way the world works, connects and lives.

“As we navigate this global pandemic, the future of work is changing,” said Gelsinger in a blog post this month. “As the work-from-home model becomes the norm and work itself becomes more distributed, we will continue to build infrastructure and technology solutions optimized for the workplace of the future. This is a ‘black swan’ event that I believe will permanently change the way we work, learn, connect, worship and simple how we live in community with each other.”