Dell Raises Outlook, Revenue Up 11 Percent
For the quarter ended Aug. 2, Dell said revenues were up 11 percent, or $8.5 billion, compared to $7.6 billion for the same period last year, slightly beating a projection it made in early July. Net income was $501 million, compared with a net loss of $101 million year-over-year.
Despite the prolonged downturn in IT spending, the company said it anticipates revenues for the next quarter will be $8.9 billion, a 19 percent improvement over the same period a year ago, while earnings per share are poised to increase from 25 to 30 percent.
"Our performance shows we are taking the right steps during this downturn and we will continue to excel and generate sustainable profit growth with or without a recovery in our market," Dell said during Thursday's earnings call.
Revenue for enterprise products grew 10 percent year over year, compared to 13 percent for desktop PCs and 3 percent for notebooks. Quarter over quarter, enterprise solutions grew 11 percent compared with 1 percent for desktops and seven percent for notebooks.
For the most recent quarter, enterprise shipments helped fuel growth. Noting growing demand for clustering, the company said sales of its PowerEdge servers were up 18 percent. Sales of its Precision Workstation line were up 24 percent worldwide and demand for storage products increased by 70 percent, putting Dell on a run rate to hit $1 billion in storage sales this year. This quarter, storage products accounted for 20 percent of revenue.
Overall, market share growth is helping Dell thrive in a market where many are shrinking, the company said.
"There's pent up demand that will continue into next year," said Dell president and COO Kevin Rollins. "We don't know yet when that will happen but we do believe to our bones that it's going to and what we're hearing from customers that it's not a matter of if but when."
In addition to improving revenues, Rollins said the company expects to shave $1 billion off design, manufacturing, logistics and operational costs.