Feeds

Dell's profits shrink as revenue grows

Blame cheap PCs

Choosing a cloud hosting partner with confidence

Profits for Dell - the world's third-largest computer seller by shipments - declined 4.8 per cent during its fiscal fourth quarter despite an increase in sales for each of its business units.

Steeper component costs were part of the problem. Plus, cheaper consumer PCs accounted for a larger percentage of sales. Dell's net income slipped to $334m in the quarter ended January 29, compared to $351m a year ago.

Meanwhile, fiscal Q4 2010 revenue was 14.9bn, an 11 per cent increase from $13.43bn year-over-year.

After suffering through slowed technology spending in the global downturn, chief executive Michael Dell has been moving to diversify into more stable markets like the IT services biz. That focus has led Dell to acquire Perot Systems last September in a deal worth S3.9bn, but it also allowed Dell to slip into the number three spot behind Acer in the worldwide PC market.

“Our solutions portfolio is expanding rapidly, driven by our strong capabilities, ongoing innovation and smart acquisitions," said the D-man in a prepared statement. "We continue to listen to and engage closely with customers through millions of conversations and interactions each day, enabling Dell to provide more relevant, value-oriented solutions to help meet their unique needs.”

Dell's Large Enterprise revenue was $4.2bn, up 8 per cent over the same period last year. Operating income for the quarter was $281m, an 8 per cent improvement over that period.

Public sector sales were $3.8bn, a 16 per cent boost counting revenue from Perot Systems — and a 3 per cent increase without. Operating income was $333m, up 15 per cent.

Small and medium business revenue was $3.3bn, up 10 per cent year-over-year. Dell said the growth was driven by stronger sales of mobile products and servers, with shipments rising 18 per cent compared to fiscal 2008. Operating income was $282m, an 18 per cent rise year-over-year.

Revenue from Dell's consumer PCs was $3.5bn, an 11 per cent increase over fiscal Q1 2008. Shipments increased 29 per cent year-over-year, and operating income was $9m.

Dell's slumping profits are in stark contrast to the latest reported quarter of its chief rival Hewlett-Packard, whose profits jumped 25 per cent on increased sales of consumer PCs, servers, and printers.

For the full fiscal year 2010, Dell's revenue was $52.9bn, down 13 per cent compared to fiscal 2009. Full-year net income was $1.43bn, a 42 per cent drop from the previous fiscal year.

The company didn't provide a dollar figure for its outlook on the first quarter of its fiscal 2011, but the company said it's "cautiously optimistic" that demand in its important commercial business will continue into the next fiscal year. Dell added that in the longer term, it is confident the company can generate growth in revenue, operating-income margin, and cash flow from operations. ®

Internet Security Threat Report 2014

More from The Register

next story
Bono apologises for iTunes album dump
Megalomania, generosity and FEAR of irrelevance drove group to Apple deal
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
prev story

Whitepapers

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.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.