Dell Technologies Inc. slipped in postmarket trading after delivering a disappointing outlook, stoking fears of a prolonged downturn in demand for computers and office equipment.

Revenue will decrease about 19 per cent sequentially in the fiscal first quarter ending in May, Chief Financial Officer Tom Sweet said on an earnings call Thursday. Infrastructure — which has led growth in recent quarters — will be down by a percentage in the mid-20s, Sweet added.

The outlook overshadowed better-than-expected fiscal fourth-quarter earnings. The shares slipped about 3 per cent in extended trading, erasing a 7 per cent rally.

Net revenue in the fourth quarter decreased 11 per cent to US$25 billion, the Round Rock, Texas-based company said earlier Thursday in a statement. It was a smaller contraction than the 16 per cent expected by analysts. Profit, excluding some items, was US$1.80, better than the US$1.64 expected by activists.

The beat was largely due to strong demand for infrastructure such as storage, Rob Williams, senior vice president for investor relations, said in an interview. The division’s sales increased 7 per cent to US$9.9 billion while the average analyst estimate was for the segment to show little change. 

Dell is grappling with cratering demand for personal computers since the pandemic boom days. In February, the company said it would cut about 6,650 jobs, citing eroding market conditions. Many investors took this as a sign that computer demand will not recover soon, said Bloomberg Intelligence’s Woo Jin Ho.

For the full fiscal year, revenue will be down between 12 per cent to 18 per cent, as the company sees a “wide range of outcomes,” Sweet said on the call. At the midpoint, this is a less severe decline than the 17 per cent expected by analysts. Adjusted profit will be about US$5.30, below the US$6.29 average analyst estimate. 

The company also announced that Sweet will retire at the end of the second fiscal quarter and be replaced by Senior Vice President Yvonne McGill, who is currently corporate controller.