Tuesday, May 22nd 2012
Dell Reports First Quarter Financial Results
Dell announced its fiscal 2013 first quarter results today, continuing to show progress in its move to being a total enterprise services and solutions provider. Revenue for the quarter was $14.4 billion, with GAAP operating income of $824 million, and earnings of $0.36 per share.
"We're committed to continuing our strategy to re-shape Dell's business as an end-to-end IT provider," said Michael Dell, chairman and CEO. "We saw continued progress in our first quarter with the innovative IT solutions we're providing - notably our latest Dell servers, storage, networking and services that deliver customers enhanced productivity."
"We continued to shift the mix of our business during a challenging environment," said Brian Gladden, Dell chief financial officer. "Our enterprise solutions and services businesses now account for 50 percent of our gross margin, and we'll continue to make the necessary investments to maintain our progress."
Results
● Revenue in the quarter was $14.4 billion, a 4 percent decrease from the previous year.
● GAAP earnings per share in the quarter was 36 cents, down 27 percent from the previous year; non-GAAP EPS was 43 cents, down 22 percent.
● GAAP operating income for the quarter was $824 million, or 5.7 percent of revenue. Non-GAAP operating income was $1 billion, or 7 percent of revenue.
● Cash used in operations in the quarter was $138 million. For the past four quarters, Dell has generated $4.9 billion in cash flow. Dell ended the quarter with $17.2 billion in cash and investments.
Fiscal-Year 2013 First Quarter Highlights
Strategic Highlights:
● Dell Enterprise Solutions and Services revenue grew 2 percent year over year to $4.5 billion and contributed half of Dell's gross margin. The ESS revenue grew 5 percent excluding third-party storage.
● Dell Services revenue was $2.1 billion, up 4 percent. Services backlog increased 9 percent to $15.4 billion.
● Dell-owned storage grew 24 percent to $423 million.
● Server and networking revenue grew 2 percent.
Business Units and Regions:
● Large Enterprise revenue was $4.4 billion in the quarter, a 3 percent decline. Operating income for the quarter was $402 million, or 9.1 percent of revenue.
● Public revenue was $3.5 billion, a 4 percent decrease. Operating income for the quarter was $271 million, or 7.8 percent of revenue.
● Small and Medium Business revenue grew 4 percent to $3.5 billion. Enterprise Solutions and Services revenue increased 17 percent, led by services revenue growth of 23 percent and servers and networking of 16 percent. SMB had $389 million in operating income, or 11.2 percent of revenue.
● Consumer revenue was $3 billion, a 12 percent decline. Operating income was $32 million or 1.1 percent of revenue.
● Asia-Pacific and Japan revenue was flat but China increased 9 percent. EMEA revenue was down 1 percent in the quarter. Americas was down 7 percent. Revenue in the BRIC countries increased 4 percent.
Company Outlook:
The company expects second quarter revenue to be in line with historical seasonal trends and be up 2-4 percent from first-quarter levels.
"We're committed to continuing our strategy to re-shape Dell's business as an end-to-end IT provider," said Michael Dell, chairman and CEO. "We saw continued progress in our first quarter with the innovative IT solutions we're providing - notably our latest Dell servers, storage, networking and services that deliver customers enhanced productivity."
"We continued to shift the mix of our business during a challenging environment," said Brian Gladden, Dell chief financial officer. "Our enterprise solutions and services businesses now account for 50 percent of our gross margin, and we'll continue to make the necessary investments to maintain our progress."
Results
● Revenue in the quarter was $14.4 billion, a 4 percent decrease from the previous year.
● GAAP earnings per share in the quarter was 36 cents, down 27 percent from the previous year; non-GAAP EPS was 43 cents, down 22 percent.
● GAAP operating income for the quarter was $824 million, or 5.7 percent of revenue. Non-GAAP operating income was $1 billion, or 7 percent of revenue.
● Cash used in operations in the quarter was $138 million. For the past four quarters, Dell has generated $4.9 billion in cash flow. Dell ended the quarter with $17.2 billion in cash and investments.
Fiscal-Year 2013 First Quarter Highlights
● Dell Enterprise Solutions and Services revenue grew 2 percent year over year to $4.5 billion and contributed half of Dell's gross margin. The ESS revenue grew 5 percent excluding third-party storage.
● Dell Services revenue was $2.1 billion, up 4 percent. Services backlog increased 9 percent to $15.4 billion.
● Dell-owned storage grew 24 percent to $423 million.
● Server and networking revenue grew 2 percent.
Business Units and Regions:
● Large Enterprise revenue was $4.4 billion in the quarter, a 3 percent decline. Operating income for the quarter was $402 million, or 9.1 percent of revenue.
● Public revenue was $3.5 billion, a 4 percent decrease. Operating income for the quarter was $271 million, or 7.8 percent of revenue.
● Small and Medium Business revenue grew 4 percent to $3.5 billion. Enterprise Solutions and Services revenue increased 17 percent, led by services revenue growth of 23 percent and servers and networking of 16 percent. SMB had $389 million in operating income, or 11.2 percent of revenue.
● Consumer revenue was $3 billion, a 12 percent decline. Operating income was $32 million or 1.1 percent of revenue.
● Asia-Pacific and Japan revenue was flat but China increased 9 percent. EMEA revenue was down 1 percent in the quarter. Americas was down 7 percent. Revenue in the BRIC countries increased 4 percent.
Company Outlook:
The company expects second quarter revenue to be in line with historical seasonal trends and be up 2-4 percent from first-quarter levels.
2 Comments on Dell Reports First Quarter Financial Results
Let me sum it up in one sentence: "shares plunged 17% Wednesday and hit their lowest point in 20 months after the company's quarterly update raised questions about the strength of computer sales, overall spending on technology and the company's ability to make the business grow."
People are buying smartphones and tablet computers instead of desktops and laptops--a market HP (laying off 7% of their global workforce) and Dell have struggled to enter. It's hurting their bottomline...a lot. Look at those year over year projections in the op--they're all negative and by a huge margin.
This is bad news, very bad news. :(
They make more off business thin client type pcs and servers and cloud based services then they are standard consumer pcs.
dell also purchased sonicwall and is also considering purchasing a networking hardware company of some sort... I don't have too many details but I have seen mentions of it on some facebook pages... don't know how legit thier claims are...
hypervisors and cloud infrastructure are driving this...