Dell reports earnings, income up 27 percent
The world's No. 2 PC maker shows signs of improvement after a rough year.
Updated at 3:30 PST with additional comments from Dell.
After more than a year of "preliminary" filings, Dell reported its official quarterly earnings Thursday, garnering $15.6 billion in revenue, and earnings of 34 cents per share.
The company's net income rose 27 percent from $601 million a year ago to $766 million this quarter. Following a tough year for the Round Rock, Texas PC maker, which included the wrap-up of its internal investigation into its accounting practices,, and the refiling of more than three years' worth of SEC reports, the company reported revenue results nine percent higher than the same quarter a year ago.
Though market research firm iSupplithat Dell continues to lose market share to rival Hewlett-Packard globally, CEO Michael Dell said in a statement that Thursday's financial results meant the company is "making solid progress." He added that Dell will be focusing more on consumer products with an emphasis on design, personalization and lower costs. The U.S. consumer PC business, where Dell still leads in units shipped, saw revenue losses of six percent from a year ago. The company's server and storage businesses each grew eight percent, however.
Said CFO Donald Carty on a conference call with investors, "We want to do a better job...but we are pleased with the quarter." The idea of future improvement was a running theme throughout the call.
Following the revelation this past summer that Dell accountants had altered quarterly earnings results to meet investor guidance and expectations, Dell no longer gives guidance for subsequent quarters, which seemed to frustrate investors as they struggled to determine how to gauge the level of Dell's future success. Carty said they would know in relation to the overall success of the various industries in which the company participates. "If we're not growing faster than the industry, we're not doing our job," he said.
Carty also noted that the company is flush with cash, with about $15 billion currently on the books and has plans to invest in several key areas, as well institute stock buybacks when the board of directors gives its OK. Dell had ceased stock repurchasing during its internal investigation.
Dell, the company's chairman and chief executive, also outlined what will be the five key areas of investment for the company going forward: consumer products, emerging markets, notebook PCs, small and medium businesses, and enterprise products. Carty noted, "Our current share in each of those (areas) leaves lots of room for expansion."
Dell declined to be specific, however, about the company's most recent experiment in the retail business. "We're in the early stages of this," he said. "You can expect to see a number of additional (retail partners) in the biggest countries in the world. So far, it's gone quite well." He did not provide a specific time line.