Dell ups Q4 revenue, net income
Servers, storage, and services drive growth
Dell Computer posted strong fourth-quarter and full-year earnings Thursday on the back of increased shipments worldwide, it said.
Fourth-quarter net income was $603 million for Dell’s fiscal year 2003 fourth quarter, or the period ending Jan. 31, resulting in earnings per share of $0.23. This compares to $456 million in the previous year’s fourth quarter. Revenue was $9.74 billion for the fiscal year 2003 fourth quarter, compared to $8.06 billion in the last year’s fourth quarter.
The results met the expectations of analysts surveyed by Thomson First Call, who had predicted earnings per share of $0.23 and revenue of $9.73 billion.
Despite an economic slump that has hurt many IT vendors, Dell set company records for both net income and revenue. And the company is poised to do so again in the upcoming year, said Kevin Rollins, Dell’s president and chief operating officer, on a conference call Thursday.
“We don’t expect a near-term improvement in economic conditions. But soft demand is not an excuse for poor results,” Rollins said.
For the full 2003 fiscal year, Dell posted net income of $2.12 billion on revenue of $35.4 billion. In 2002, the Round Rock, Texas, company posted net income of $1.78 billion on revenue of $31.2 billion, excluding a special charge tied to job reductions.
Compared to last year’s fourth quarter, shipments of PowerEdge servers increased 28 percent, shipments of Inspiron and Latitude notebooks increased 33 percent, and shipments of Dimension and OptiPlex desktops increased 24 percent. Revenue from external storage systems was up 87 percent, with the strongest growth in storage coming from products developed jointly by Dell and EMC.
Servers, storage, and services are driving Dell’s growth, said Michael Dell, chairman and chief executive officer, on the conference call.
“We’re seeing a lot of customers move from Unix to Linux and Windows, and we’re a major beneficiary there,” he said. Financial, manufacturing and retail are some of the vertical markets that are switching from Unix systems to Dell’s Linux or Windows systems running processors from Intel, and the company’s partnership with Oracle is bringing Dell servers into datacenters, he said.
Dell downplayed concerns over a possible war in the Middle East, saying the company’s customers haven’t indicated they are slowing purchases due to the uncertainty around conflict between the U.S. and Iraq. He cited the company’s 25 percent growth in fourth-quarter unit shipments, compared to 1 percent growth industry wide, as proof that Dell’s customers aren’t slowing their spending.
The company introduced its first handheld product last November, the Axim. It has done better than the company expected, according to Dell, although he declined to provide specific figures. Axim customers have reported delays in receiving their handhelds.
Dell-branded printers will soon appear on the market, Dell said. The company announced an agreement with Lexmark International to sell printers manufactured by Lexmark with a Dell brand last September. At the time, the companies said products were expected in the first half of 2003.
The majority of Dell’s fourth-quarter business came from North and South America, which accounted for 69 percent of revenue, the company said in its release. However, growth was especially strong in Asia-Pacific and Japan, which saw unit shipments increase 42 percent in the quarter. Fourth-quarter shipments to Europe, the Middle East, and Africa were up 18 percent.
Dell expects earnings per share of $0.23 and revenue of $9.5 billion in the first quarter of its 2004 fiscal year, it said. Ahead of Thursday’s results, the company’s stock (DELL) closed at $23.25 on the Nasdaq, an increase of $0.31, or 1.35 percent.
