Dell Reports Revenue of $15.6 Billion in Q3; Earnings Per Share up 26 Percent.Results Show Strength in Emerging Countries, Mobility and Enterprise Products ROUND ROCK, Texas -- Dell (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :DELL) today reported results for its third quarter of fiscal year 2008, with revenue up nine percent year-over-year to a record $15.6 billion, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. up 13 percent to $829 million and earnings per share of $0.34, a 26 percent increase over the prior year. Cash from operations totaled $1 billion, while cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has at the end of the quarter were $14.6 billion. The company plans to resume its share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program in early December. "We embarked this year on a long-term strategy to re-ignite growth and our Q3 results indicate we're making solid progress through investments in five key business priorities - consumer, emerging countries, notebooks, enterprise and small/medium business," said Michael Dell Michael Saul Dell (born February 23, 1965, in Houston, Texas) is the founder and CEO of Dell, Inc. Biography Early life and education The son of an orthodontist, Dell was born in to an upper-class Jewish family and attended Herod Elementary School in Houston, , chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Initiatives to simplify IT will drive innovation across all industries, creating new value for customers and shareholders. For consumers we will continue to launch products that set the bar for design, personalization Custom tailoring information to the individual. On the Web, personalization means returning a page that has been customized for the user, taking into consideration that person's habits and preferences. , and price performance - and we will make them available in more places than ever before." [TABLE OMITTED] All comparisons in this press release are year-over-year unless otherwise noted. Profitability Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. benefited from strength in mobility, solid demand in enterprise products and a continued favorable component-cost environment. These benefits were largely offset by costs the company is incurring as it restructures to improve productivity and execution, reduce headcount where appropriate, and invest in infrastructure and key growth priorities. For example, the company incurred $50 million, or $0.02 per share, related to employee reductions and asset disposals. In addition, the company incurred $28 million, or $0.01 per share related to the Audit Committee investigation which was concluded during the quarter and other related costs. Earnings for the quarter were positively impacted by an adjustment of $45 million, or $0.02 per share, to lower the company's effective tax rate for the year primarily because of a larger-than-expected mix of profits from outside the U.S. "Our strong cash flow in the quarter demonstrates we are taking the right actions to create value. We are committed to a growth strategy that includes acquisitions as well as a long-term share repurchase plan share repurchase plan A corporation's plan for buying back a predetermined number of its own shares in the open market. Institution of a share repurchase plan derives from management's view that the company has limited outside investment opportunities and , as we transition cash and investments to lower levels while retaining financial flexibility," said Don Carty, vice chairman and CFO See Chief Financial Officer. , Dell. Regional and Product Highlights Revenue for the Americas Business, which includes corporate and public customers in the U.S., as well as Americas International, was up seven percent. The company maintained its No. 1 position in the U.S. commercial segment, with 34 percent of all units shipped1. Americas International, which includes Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and Canada, had revenue growth of 19 percent year-over-year with 45 percent growth in Brazil. In addition, a Forrester Research Forrester Research is an independent technology and market research company that provides its clients with advice about technology's impact on business and consumers. Corporate facts
named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. and European enterprises. The survey of 565 PC decision makers also showed that Dell in Q3 held "its sizable lead over the second-closest competitor" across the regions and company sizes in both product segments. In Asia-Pacific and Japan, where the company is actively expanding its presence, revenue in the quarter grew by 18 percent on a 20 percent increase in units. Highlights in the region include India and China where revenue grew 47 percent and 22 percent, respectively. Revenue increased 14 percent and shipments were up 13 percent in Europe, Middle East and Africa (EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. ). Revenue for servers and storage in the region were up 15 percent and 13 percent, respectively. Sales outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. were up 16 percent and represented 46 percent of the company's overall revenue, reflecting continued strength in emerging countries. Globally, revenue from mobility products increased 19 percent on a 25 percent increase in units. Revenue from both servers and storage grew eight percent and shipments of servers increased seven percent. Enhanced services Enhanced service is service offered over commercial carrier transmission facilities used in interstate communications, that employs computer processing applications that act on the format, content, code, protocol, or similar aspects of the subscriber's transmitted information; revenue grew seven percent to $1.4 billion. Desktop PC revenue declined one percent as the industry continues to shift towards mobility. Software and peripherals revenue posted an increase of 11 percent. Key Business Priorities * Consumer: While revenue for Dell's U.S. Consumer business declined six percent, the business segment made strong progress against key initiatives, including new product design, channels, product personalization and mobility. Consumers will be able to buy Dell products in nearly 10,000 stores including Gome, China's largest consumer electronics retailer, and Staples' 1,400 stores across the U.S. During the quarter, Dell closed the acquisition of ZING Systems Inc., a consumer technology and services company focused on always-connected audio and entertainment devices. * Emerging Countries: China, Brazil and India registered strong unit growth of 26, 30 and 42 percent, respectively. Combined Brazil, Russia, India and China (BRIC BRIC Brazil, Russia, India and China (world affairs) BRIC Brooklyn Information & Culture BRIC Biological Research Information Center (Korea) BRIC Benign Recurrent Intrahepatic Cholestasis ) revenue growth during the quarter was 32 percent. The company plans to continue its initiative of tailoring solutions to meet specific regional needs, enhancing partner relationships to provide customer choice and flexibility, and expansion into these and other emerging countries that represent 85 percent of the world's population. * Notebooks: Notebooks are expected to grow at six times the rate of desktop systems for the next several years, and Dell plans to increase the speed with which it introduces new products, while lowering costs and tailoring mobile devices for specific customer segments. The Dell XPS The Dell XPS is a high-end line of gaming computers sold by Dell. The "Xtreme Performance System", or XPS, dates back to 1993. Development In early 1993 it was agreed by Dell's staff that it needed to create products to serve the rapidly growing consumer PC market. M1330 notebook was labeled a "dream machine" in Time Magazine's Best Inventions of 2007 issue earlier this month. * Enterprise: Dell unveiled multiple products and marketing initiatives to help customers simplify IT. These included new virtualization technologies See VT. See also virtualization. that embed em·bed also im·bed v. em·bed·ded, em·bed·ding, em·beds v.tr. 1. To fix firmly in a surrounding mass: embed a post in concrete; fossils embedded in shale. Citrix's XenServer on future PowerEdge servers, allowing customers to install and manage virtual machines almost immediately upon start up. On Demand Desktop Streaming will simplify desktop administration and management by combining all the benefits of traditional thin clients with the performance of standard desktops. Dell also completed the acquisition of Silverback Technologies, growing its Software As A Service (SaaS) IT monitoring and management capabilities. * Small/Medium Business: New products for the SMB market See SMB. included the PowerVault MD3000i which simplifies storage consolidation. In this, the fastest growing segment of the storage market - iSCSI, Dell also announced the planned acquisition of EqualLogic. Company Outlook The company continues to focus on strategic priorities that will provide better value to customers while driving a more optimal balance of liquidity, profitability and growth. As the company executes against these priorities it will continue to incur costs as it restructures to improve productivity and execution, reduce headcount where appropriate, and invest in infrastructure and acquisitions. These actions, which the company believes are necessary to drive long-term sustainable value Sustainable Value Sustainable Value is an approach to measure and manage sustainability performance. The concept was developed by researchers who are working today for Queen's University Belfast , may adversely impact the company's performance. In addition, the company's near term results could be adversely impacted by a slower decline in component costs and a seasonal shift in mix to U.S. consumer and international regions. Strategy Update and Earnings Call Dell will conduct a 90-minute conference call today, Nov. 29, at 3:30 p.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. , to discuss its long-term strategy and Q3 results. Mr. Dell, Mr. Carty and Steve Schuckenbrock, president of Global Services and Chief Information Officer, will provide an update focused on the company's key growth priorities. Annual Meeting and Analyst Meeting Update The Company's annual meeting of shareholders will be held Dec. 4, 2007, at the company's Round Rock, Texas, headquarters. The Company also plans to conduct an analyst meeting on April 2 and 3, 2008, in Round Rock, Texas. About Dell Dell Inc. (NASDAQ:DELL) listens to customers and delivers innovative technology and services they trust and value. Uniquely enabled by its direct business model, Dell is a leading global systems and services company and No. 34 on the Fortune 500. For more information, visit www.dell.com, or to communicate directly with Dell via a variety of online channels, go to www.dell.com/conversations. To get Dell news direct, visit www.dell.com/RSS. 1 Source: IDC Preliminary Top 10 Vendors, Worldwide PC Shipments, Third Quarter 2007 (Preliminary) 2 Source: Forrester Research, Inc., How Enterprise Buyers Rate Their PC Suppliers And What It Means For Future Purchases. The State Of The Enterprise PC -- 2007 And Beyond. Ben Gray, November 12, 2007 Special Note Statements in this press release that relate to future results and events (including statements about future financial and operating performance) are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. based on Dell's current expectations. Actual results and events in future periods could differ materially from those projected in these forward-looking statements because of a number of risks and uncertainties including: general economic, business and industry conditions; our ability to maintain a cost advantage over our competitors; local economic and labor conditions, political instability, unexpected regulatory changes, trade protection measures, tax laws, copyright levies and fluctuations in foreign currency exchange rates; our ability to accurately predict product, customer and geographic sales mix sales mix See product mix. and seasonal sales trends; information technology and manufacturing infrastructure failures; our ability to effectively manage periodic product transitions; any additional issues or matters that may arise from the ongoing SEC investigation; our ability to successfully remediate identified internal control deficiencies; our reliance on third-party suppliers for quality product components, including reliance on several single-source or limited-source suppliers; our ability to access the capital markets; litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and governmental investigations or proceedings arising out of or related to accounting and financial reporting matters; our acquisition of other companies; our ability to properly manage the distribution of our products and services; effective hedging of our exposure to fluctuations in foreign currency exchange rates and interest rates; obtaining licenses to intellectual property developed by others on commercially reasonable and competitive terms; our ability to attract, retain and motivate key personnel; loss of government contracts; expiration of tax holidays or favorable tax rate structures; changing environmental laws; and the effect of armed hostilities, terrorism, natural disasters and public health issues. For a discussion of those and other factors affecting Dell's business and prospects, see Dell's periodic filings with the Securities and Exchange Commission. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
|
|||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion