(Reuters) – Dell Technologies Inc (N:) reported a 15 percent rise in quarterly revenue on Thursday, as businesses were forced to upgrade their systems running on older Windows technology, as well as strong performance in software maker VMware Inc.
The results come ahead of voting on the company’s offer to buy back shares tied to its 81 percent economic stake in software maker VMware (N:), which would allow a return to public markets without going through the rigors of a traditional initial public offer process.
Dell earlier this month sweetened its cash-and-stock offer to $23.9 billion, winning backing from shareholders including Carl Icahn, who had opposed the initial bid, as well as from Elliott Management and Canyon Partners.
The higher offer is scheduled to be voted on Dec.11.
“Assuming the transaction closes following the stockholder vote, this will simplify Dell’s capital structure and increase alignment with VMware while maintaining VMware’s independence,” VMware Chief Executive Patrick Gelsinger said on a post-earnings conference call with analysts.
Dell reported an 11 percent jump in revenue from its Client Solutions Group, which includes products such as desktop PCs, notebooks and tablets, and branded peripherals, for the third quarter ended Nov. 2.
The gain was largely due to businesses looking to replace their older systems following Microsoft Corp’s (O:) decision to stop all support for its Windows 7 operating system early in 2020.
“The market has reached a state of stabilization so far this year, primarily driven by strong commercial demand driven by Windows 10 upgrades, being linked to end of Windows 7 support,” said Ishan Dutt, an analyst at research firm Canalys.
Dell held 17 percent of the global PC market share year-to-date, behind HP Inc’s (N:) 23 percent and Lenovo Group Ltd’s (HK:) 21 percent share, according to data from Canalys.
Total revenue rose 15 percent to $22.48 billion.
However, net loss attributable to Dell Technologies widened to $876 million, from $846 million a year earlier.
Loss per share remained unchanged at $1.84 per share.
VMware posted robust results, beating on both profit and revenue estimates on strong demand for its software to boost cloud computing efficiency.
The company’s shares, up nearly 30 percent this year, rose 2 percent to $165 after the bell.
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