Dell reports profitable third quarter

16 Nov 2011

Michael Dell, chairman and CEO of Dell

Dell’s strategic focus on higher-value opportunities, combined with an increased mix of enterprise solutions and services sales has paid off for the company. Dell reported increased profitability on revenue of US$15.4bn 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 86pc over the last 12 months.”

Dell’s GAAP earnings per share hit US49 cents, up 17pc; non-GAAP EPS was US54 cents, up 20pc.

The company’s GAAP operating income amounted to US$1.1bn, or 7.4pc of revenue. Non-GAAP operating income was US$1.3bn, or 8.4pc of revenue.

Cash flow from operations reached US$851m for the quarter and US$5.2bn over the last four quarters.

Dell ended the quarter with US$16bn in cash and investments and repurchased US$600m in stock in the quarter. For the year, Dell has spent US$2.18bn to purchase 142m shares of Dell stock.

“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.”