Dell reports higher profits
Market share up
Dell has posted a fiscal second quarter profit of £501 million, beating analysts' expectations, as its worldwide shipments rose 18 per cent.
Dell reported net income of $501 million, or $0.19 per share, compared with a net loss of $101 million, or $0.04 per share in the same quarter last year and profits of $0.16 per share in the previous quarter.
Revenues for the quarter, which ended 02 August 2002, were $8.46 billion, up from $8 billion in the previous quarter and up from $7.6 billion in the same quarter last year, which means that Dell's revenues are up 4.9 percent sequentially and 11.1 percent year-on-year.
Importantly, Dell said that worldwide product shipments rose 18 percent, with shipments of servers and workstations jumping 20 percent. The company also said that it expects to increase shipments by more than 5 percent in the next quarter, projecting third-quarter revenue of $8.9 billion.
Dell product shipments in EMEA were up 5 percent in the quarter and up 23 percent in the US. The company credited its strength in the US to a 21 percent increase in shipments to education and government customers. The company also had 12 percent growth in Asia-Pacific and Japan.
Kevin Rollins, Dell's president and chief operating officer, said that Dell is ahead of plans for its $1 billion cost-trimming programme. Dell said it generated nearly $870 million in cash from operations during the second quarter. At the end of the period, total cash and investments totalled $8.6 billion. Inventory was flat with the year-ago quarter, as product shipments rose sharply.
On Thursday, Dell shares rose in after-hours trade to $27.20, after having initially topped $27.40. Dell shares had closed at $27.14 in regular Nasdaq trade.
With speculation mounting that Dell will soon enter new markets, Chief Executive Officer Michael Dell admitted in a conference call that the firm "was "likely to enter the PDA and printer markets." But went on to say that the company would remain focused on it core products, computer systems, despite any new moves.