Dell Technologies, the new Dell EMC generated an operating loss of $3.3 billion for FY 2017, the company announced Thursday. In the fourth quarter alone — the first in which it officially operated as a single, merged organization — Dell EMC reported sales of $20.1 billion and an operating loss of $1.7 billion, Bloomberg reports.
On the bright side, Dell EMC reported PC shipments of 11 million, the most since the fourth quarter of 2011. VMware, also part of the Dell deal with EMC, had revenue of $1.9 billion in the fourth quarter. As a new part of Dell Technologies, there was not year-over-year growth to report.
- Dell Technologies said it has also paid down approximately $7 billion in debt since closing the EMC transaction last September.
Big mergers are always expensive, and the Dell/EMC merger cost $62 billion, creating the world's largest privately held tech company. That makes for a very complicated marriage, and equates to some big hits to the bottom line. The company said its Q4 and full year financials "reflect the growth and impact of the EMC transaction."
Dell EMC serves 98% of Fortune 500 companies, and that means big money, too. So it may just be a matter of time before the company can fully right itself. After all, Q4 was the first time quarterly reports included financials from both companies.
But the down swing could also be indicative of another trend. Dell EMC is all about selling hardware at a time when the rest of the world is all about software and subscription cloud services. However, Dell Technologies CFO Tom Sweet said in a statement he is "pleased" with the companies overall performance "with growth in our client business and positive momentum from investments we're making in our infrastructure business."