RealTime IT News

Dell Expecting Holiday Sales Cheer

Strong global sales in servers and storage systems helped computer maker Dell meet expectations for its fiscal third quarter and predict higher sales for the holiday shopping season. But the Round Rock, Texas-based company hinted Thursday that the jury was still out on how its holiday enterprise sales would turn out.

Net income for the computer bellwether was $677 million, or 26 cents per share in the quarter ending Oct. 31st, up 21 percent from its profit of $561 million, or 21 cents per share during the same, year ago quarter.

The results, which met analysts' expectations, were seen as another sign that the technology industry is stabilizing after a nearly three-year recession in which most major technology vendors' results were flat. Dell said it expects revenues to rise by 18 percent as a result of holiday sales expectations for the fourth quarter.

"Customers and investors get best value over time from companies like Dell that are growing and financially very healthy," Michael Dell, chairman of the board and chief executive officer said in a statement. "The market should insist on both, and it's a credit to our teams and a better way of doing business that we're consistently meeting those expectations."

Revenue for the company was up by 16 percent to $10.6 billion, compared to $9.1 billion in revenue last year. Overall, Dell said its revenue was more than 40-percent higher than two years ago, at a time when sales across the industry are essentially unchanged, or flat.

Global server shipments increased by 30 percent, while sales of external storage systems were up by 68 percent in the quarter, a record amount for the company. Total revenue from enterprise computing systems was up 32 percent. Regionally, Dell said Asia-Pacific and Japan led the company's largest growth opportunity with a 35-percent increase. The company said its strength in the region was most profound in servers and notebook computers, which were up 37 and 36 percent, respectively. Execs said China in particular was exceptional, including a 67-percent increase in volumes of servers and a 70-percent gain in notebook computers. The company's 25-percent growth in Japan moved it to the No. 3 share position in the market, up from No. 4 a year ago.

As for the future, Dell said his company anticipates its fourth-quarter shipments will be up more than 25 percent year-over-year, and again outpace the rest of the industry.

"We're seeing a little bit better capital spending," Chief Financial Officer Jim Schneider said during a conference call to investors.

For the fourth quarter, Dell said it expects revenue of $11.5 billion, an increase of 18 percent, and earnings per share of 28 cents, up 22 percent.