Dell Meets Expectations
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Dell Computer Thursday met the Street's expectations of 25 cents per share third quarter earnings on the back of strong sales in enterprise products and notebook computers.
Dell's net revenue was up 22 percent to $8.3 billion, marking the company's 27th consecutive quarter of sequential revenue growth. Combined sales of enterprise products and notebook computers were up more than 40 percent, which Dell said helped drive a 40 percent gain in net income to $674 million, compared to a net income of $438 million for the same period last year.
"Our worldwide shipments of servers and notebooks grew significantly faster than the overall industry rate," said Michael Dell, chairman and chief executive officer of the company. "We added more than a point of market share and moved closer to the No. 1 ranking in both products."
Dell added that more than 50 percent of the company's revenue and about two-thirds of its operating profit came from enterprise products, notebook computers and services.
"We're seeing history repeat itself: As they did with desktop PCs, customers of higher-end computing products and services are increasingly choosing to purchase them directly, from Dell," Dell said.
Dell also reported lower operating expenses -- 11.4 percent of revenue -- down sequentially for the second quarter. Cash from operations was more than $1 billion, which was used to buy back 21 million of the company's shares. To date the company has bought back 850 million shares at an average of about $7 each.
Globally, third quarter product shipments rose 21 percent year-over-year. Sales were especially strong in Asia-Pacific/Japan, with a 39 percent quarterly revenue improvement. Sales growth in China exceeded 70 percent and the company also initiated direct sales in India. Revenue was up 24 percent in the Americas, including a 56 percent increase in Latin America. Sales in Europe, the Middle East and Africa were up seven percent.