Dell Reports Strong Profitability in Third Quarter

  • Earnings per share of $0.49 (GAAP) and $0.54 (non-GAAP) up 17 and 20 percent, respectively; Operating Income up 12 percent (GAAP); up 10 percent (non-GAAP)
  • Enterprise solutions and services revenue at all-time high of $4.7 billion
  • Cash flow from operations for the quarter was $851 million and $5.2 billion for the past four quarters

ROUND ROCK, Texas — (BUSINESS WIRE) — November 15, 2011 — Dell’s continued strategic focus on higher-value opportunities, combined with an increased mix of enterprise solutions and services sales, resulted in increased profitability on revenue of $15.4 billion in its third quarter, flat compared with revenue a year ago.

“Our results this quarter and over the past year reflect a new Dell, one focused on providing our customers productivity-enhancing solutions either developed organically or acquired,” said Michael Dell, chairman and CEO. “We’re now investing in research and development activities at almost a billion-dollar annual run rate and our earnings per share is up 86 percent over the last 12 months.”

Revenue for Dell’s enterprise solutions and services business – including sales of servers, storage, networking, and services – increased 8 percent over the same quarter last year to $4.7 billion, an all-time high. As the revenue mix steadily shifts more to the higher-value enterprise portfolio, Dell is delivering on its commitment to improve profitability, with operating income up 12 percent for the quarter and at 7.6 percent of revenue for the fiscal year to date.

“We delivered strong third-quarter results, maintaining our focus on operating income and improving our mix of higher-value enterprise solutions,” said Brian Gladden, Dell chief financial officer. “Consistent with our strategy and the investments we have made, we continued to see excellent momentum in our enterprise business, with double-digit revenue growth in services, servers and networking, and in key growth countries, despite some macroeconomic uncertainty.”

Results:

  • Revenue in the quarter was $15.4 billion, flat compared with the same quarter last year.
  • GAAP earnings per share was 49 cents, up 17 percent; non-GAAP EPS was 54 cents, up 20 percent.
  • GAAP operating income was $1.1 billion, or 7.4 percent of revenue. Non-GAAP operating income was $1.3 billion, or 8.4 percent of revenue.
  • Cash flow from operations was $851 million for the quarter and $5.2 billion over the last four quarters. Dell ended the quarter with $16 billion in cash and investments and repurchased $600 million in stock in the quarter. For the year, Dell has spent $2.18 billion to purchase 142 million shares of Dell stock.

Fiscal-Year 2012 Third Quarter and Year-To-Date Highlights

           

Third Quarter

Fiscal Year-to-Date

(in millions)

FY12

 

FY11

 

Change

FY12

 

FY11

 

Change

Revenue $ 15,365 $ 15,394 0 % $ 46,040 $ 45,802 1 %
 
Operating Income (GAAP) $ 1,142 $ 1,024 12 % $ 3,500 $ 2,288 53 %
Net Income (GAAP) $ 893 $ 822 9 % $ 2,728 $ 1,708 60 %
EPS (GAAP) $ 0.49 $ 0.42 17 % $ 1.46 $ 0.87 68 %
 
Operating Income (non-GAAP) $ 1,288 $ 1,167 10 %

$

3,992

$

2,863

39

%

Net Income (non-GAAP) $ 983 $ 875 12 % $ 3,039 $ 2,088 46 %
EPS (non-GAAP) $ 0.54 $ 0.45 20 % $ 1.62 $ 1.06 53 %

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