Global Growth in Dell’s Enterprise Solutions Contributes to Strong First Quarter Results
Information about Dell’s use of non-GAAP financial information is
provided under “Non-GAAP Financial Measures” below. Non-GAAP financial
information excludes costs related primarily to the amortization of
purchased intangibles, severance and facility-action costs,
acquisition-related charges and a provision for settlement of securities
class-action litigation. All comparisons in this press release are year
over year unless otherwise noted.
GAAP gross margin was 16.9 percent of revenue. Non-GAAP
gross margin was 17.6 percent of revenue.
GAAP operating expenses were 12.7 percent of revenue. Non-GAAP
operating expenses were 12 percent of revenue, or $1.79 billion,
down from 13.1 percent a year ago as Dell continues its strict
discipline on costs and operational execution.
GAAP operating income was $619 million, or 4.2 percent of
revenue. Non-GAAP operating income was $824 million, or 5.5
percent of revenue.
Cash flow from operations was $238 million for the quarter.
The company resumed its stock buyback program during the
quarter; spending $200 million to repurchase stock.
Virtualization, cloud computing, and heightened data storage
requirements are prompting customers to use their existing investments
more efficiently and make new investments in enterprise innovation
that drive business value. In meeting this customer need, Dell had a
39-percent increase in server revenue in the quarter. Revenue for
EqualLogic storage products grew more than 75 percent. Revenue from
services, boosted by the addition of Perot Systems, increased 53
percent as Dell builds its capabilities to provide end-to-end
Business in BRIC (Brazil, Russia, India and China) countries continued
to grow. Revenue for those countries increased 60 percent, led by
India’s 90-percent growth and Brazil’s 81 percent. China had revenue
growth of 44 percent and represents a critical growth engine for the
Mobility revenue was up 18 percent. The company introduced the
3000 series designed for small businesses that require robust
mobile computing solutions featuring powerful processors, high-end
graphics and built-in security. Dell also
its Latitude family of commercial laptops with new Intel Core i5 and
Core i7 processors and other new standards-based features.
Large Enterprise revenue was $4.2 billion, up 25
percent, led by a 61-percent increase in server revenue and a
44-percent increase in services revenue. Operating income for the
quarter was $283 million, a 47-percent improvement. As Dell commercial
customers were increasing their spending, they had more enterprise
choices with the
of PowerEdge blade, rack-mount and tower servers along with
enhancements to Dell Lifecycle Controller and Dell Management Console
(DMC). These solutions offer customers a robust platform and
management capability for virtualization, server consolidation,
mission-critical business and database applications.
Public revenue was $3.9 billion, an increase of 22 percent.
Operating income for the quarter was $298 million, a 2-percent
improvement. Revenue from services, which includes Perot Systems, more
than doubled from a year ago. Dell is the No. 1
information technology services provider in the world according to the
latest IT services worldwide share report by Gartner, Inc.
Small and Medium Business revenue was $3.5 billion, up 19
percent. Operating income was $313 million, a 36 percent increase.
Dell serves more than 10 million SMB customers globally and has more
than 50,000 registered and certified partners in Dell’s Channel
Consumer revenue was $3.2 billion, a 16-percent increase, with
operating income of $17 million. Shipments increased 20 percent. The
need for on-line access anywhere anytime helped increase mobility
revenue by 26 percent.
Michael Dell, chairman of the board and chief executive officer: “Our
strategy and the significant investments we’re making to enhance our
capabilities are providing more of the standards-based, flexible
solutions that provide customers the highest value. These efforts are
driving renewed Dell growth.”
Brian Gladden, chief financial officer: “This quarter was
highlighted by good execution in an improving economic environment. We
feel good about the growth across our commercial business as it
approaches nearly $50 billion in revenues. We will continue to make
investments in our enterprise solutions throughout the year.”