Dell Q1 profits soar, sees corporate IT revival

21 May 2010

US computer manufacturer Dell has reported a 52pc jump in net profits during the first three months of 2010, with the company pointing to the early stages of a corporate IT refresh.

Net profits during the January to the end of March period were US$441m, up from the US$290m reported during the same period in 2009.

Earnings per share of US$0.30 for the first quarter were better than the US$0.27 which had been predicted by Wall Street analysts.

Total revenue for the first quarter also beat expectations and was up 21pc to US$14.9bn compared to the same period in 2009.

Dell said the results reflected the combination of Dell and Perot Systems and “sound” company execution in an “overall improving” business environment. Dell acquired IT services provider Perot Systems last September for US$3.9bn.

The group’s Large Enterprise revenue was up 25pc to US$4.2bn, which was led by a 61pc rise in server revenue and a 44pc increase in services revenue.

Revenue from Dell’s Public division was US$3.9bn, an increase of 22pc, while small and medium business revenue was up 19pc to US$3.5bn.

Consumer revenue meanwhile rose 16pc to US$3.2bn, with shipments increasing by 20pc.

“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,” said Michael Dell, chairman of the board and chief executive 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 $50bn in revenues. We will continue to make investments in our enterprise solutions throughout the year,” added Dell’s chief financial officer Brian Gladden.

Dell also said it believed it was seeing the early stages of a corporate IT refresh. The computer giant said commercial demand continued to build in the first quarter and that it is optimistic this trend will continue throughout the year. Dell also said it expects seasonal improvements from its state and local government, consumer and education businesses in the second quarter.

Overall, the computer giant said it expects a “normal, seasonal sequential demand pick up in the low single digits” in its second quarter.

Photo: Michael Dell, chairman of the board and chief executive officer of Dell

Photo by Dell Inc

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