Upgrade to Apple Watch Series 8? National Coffee Day Fitbit Sense 2 'Hocus Pocus 2' Review Kindle Scribe Amazon Halo Rise Tesla AI Day Best Vitamins for Flu Season
Want CNET to notify you of price drops and the latest stories?
No, thank you

Dell earnings meet expectations

The PC giant delivers first-quarter earnings that match earlier projections, as growth in international sales and printer sales help the company build on its recent momentum.

Dell reported on Thursday that its first-quarter earnings met analyst estimates largely because of improved international sales. The company's first-quarter revenue was up 21 percent.

The Round Rock, Texas, PC maker reported a net income of $731 million, or 28 cents per share, in the quarter ended April 30. That figure was up from $598 million, or 23 cents per share, a year earlier, representing an increase of 22 percent. Revenue increased to $11.5 billion, compared with $9.5 billion a year ago, a 21 percent gain.

The first-quarter report narrowly beat analysts' average revenue estimate of $11.4 billion, and met projected net income of 28 cents per share, as published by Thompson First Call.

Dell executives pointed out that the company delivered its seventh straight quarter of 20 percent or greater year-over-year growth. Kevin Rollins, the company's current president and future chief executive, said Dell hopes to mirror that performance in the future.

"Our strategy proved itself in Q1 just as it has over the past several years," Rollins said. "As we progress through Q2, we want to maintain the flexibility to react to changing market dynamics while still delivering on our financial commitments."

Rollins said that pricing hardware components will likely be challenging in the near future. He added that Dell will focus on product lines and regions where higher profit margins are more readily available, in order to offset the issue.

Dell raised its first-quarter earnings estimate last month, attributing the improved financial outlook to growth in international markets. Over the past year, Dell has steadily increased its PC shipments and market share, while garnering more revenue and higher profits. The company ended its fiscal 2004 in January with a net income of $2.6 billion, or $1.01 per share, on revenue of $41 billion, moving it closer to its stated goal of reaching $60 billion in annual revenue.

The company reported first-quarter operating income of $966 million, up 19 percent from one year ago, despite higher-than-expected costs for random-access memory.

The impressive first-quarter performance was carried by strong product shipment volumes, which rose 25 percent overall from the same quarter a year ago. Dell said its fastest growth came from the Asia-Pacific/Japan region, where it recorded a 38 percent quarterly increase. In other strong performances, the computer maker's product shipments to Europe, the Middle East and Africa jumped by some 37 percent.

The company said product shipments in the United States rose 18 percent during the period, pushed by improved demand from small and medium-size businesses and consumers. The company's Americas business outside the United States was up 24 percent compared with the first quarter of 2004, including a 26 percent increase in Canada.

For the fiscal second quarter, Dell said it expects growth in product shipments of 24 percent compared with last year. The company expects to post revenue of roughly $11.7 billion, up 20 percent from a year ago, and per-share earnings of 29 cents, a 21 percent year-over-year increase.

The hardware specialist also reported record market share growth for the quarter in its printer business. Specifically, Dell grew its initial U.S. market share in printers faster than in any new product category in its history. In just one year, Dell garnered a share of more than 10 percent in inkjet printers, and in the upper teens in all-in-one printers. The company confirmed that it plans to introduce new printer models sometime in the next few weeks.

"We've been able to provide tremendous value to the market by providing ink-and-laser solutions, which are at least 20 percent cheaper than our competition," Rollins said.

The executive highlighted Dell's plans to expand its printer business internationally. It has launched its products in Europe and Australia over the past two quarters and has designs on delivering printers to the Japan and China markets before the end of the year.

Dell reported 24 percent growth in its server shipments, with revenue from its EMC-oriented systems growing by 25 percent compared with the first quarter of last year.