Feeds

Dell profit improves amid accounting woes

And ex-CEO grabbing bank

Beginner's guide to SSL certificates

Dell posted healthy sales and profit for its fiscal second quarter, spurred by favorable market conditions, including higher average selling prices and lower component costs.

Operating income for the quarter ended August 3 was $896m. Net income was $733m. The results took a hit big from $102m in expenses related to payments for expired stock options — with over $48m of that amount for ousted Dell CEO Kevin Rollins as a parting gift. The company also payed $59m for costs relating to its accounting investigation.

Net revenue totaled $14.8bn, up five per cent from the same period last year (although the comparison warrants caution, as Dell has yet to restate its 2006 financial reports).

"While our results demonstrate we've made progress against our goals, we are still in the early stages of transforming our company's structure, costs and operations," said CEO Michael Dell in a statement.

Strictly speaking, the quarterly results aren't official. Dell has labeled the numbers merely as "preliminary," due to plans to restate four years of financial data following an internal investigation of accounting practices. The year-long inquiry had found company executives cooked the books to meet quarterly sales goals. Since the investigation, Dell has also stopped giving financial forecasts into the next quarter, although it cautioned: "Near-term results could be adversely impacted by a slower decline in component costs in the second half of the year."

A breakdown of Dell's net revenue for the quarter is as follows:

Percentage of net revenue

Product Net revenue Percent
Desktop PCs $5bn 34%
Mobile PCs $3.9bn 26%
Servers and Networking $1.6bn 11%
Storage $0.6bn 4%
Enhanced Services $1.3bn 9%
Software and Peripherals $2.4bn 16%

Year-over-year, Dell's revenue from PC sales rose 2 per cent from $4.9bn. Notebook sales revenue rose 5 per cent from $3.7bn. Storage revenue increased 17 per cent from $500m the previous year. Services revenue slowed by seven per cent from $1.4bn. Software and peripherals revenues rose nine per cent from $2.2bn the previous year.

Dell's notebook operations suffered a considerable shipment backlog for its colorful Inspiron and XPS notebooks introduced in June, due to a tight supply of flat-panel displays and a manufacturing problem with the paint jobs. The company expects the supply environment will improve in the second half of the year.

Final results will be filed in the first week of November, Dell said. During that time, the company also expects to file revised reports for fiscal years 2003, 2004, 2005 and 2006 with the SEC. ®

Security for virtualized datacentres

More from The Register

next story
It's Big, it's Blue... it's simply FABLESS! IBM's chip-free future
Or why the reversal of globalisation ain't gonna 'appen
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
Bitcasa bins $10-a-month Infinite storage offer
Firm cites 'low demand' plus 'abusers'
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
CAGE MATCH: Microsoft, Dell open co-located bit barns in Oz
Whole new species of XaaS spawning in the antipodes
Microsoft and Dell’s cloud in a box: Instant Azure for the data centre
A less painful way to run Microsoft’s private cloud
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.