Dell 3Q net income more than doubles

Nov 18, 2010 By JESSICA MINTZ , AP Technology Writer
Dell logo

Personal computer maker Dell Inc. said Thursday that its net income for the latest quarter more than doubled as companies spent more to replace aging technology.

Dell's earnings topped Wall Street's expectations, and investors sent shares up nearly 6 percent after the results were announced.

Businesses of all sizes, plus government agencies and other public-sector customers, spent more with Dell in the quarter. Large enterprise revenue jumped 27 percent to $4.3 billion from a year ago, and small and medium business increased 24 percent to $3.7 billion. While networking gear maker Inc. recently reported unexpectedly slow growth in new orders from government customers, Dell said public-sector revenue rose 20 percent to $4.4 billion, with government business steady.

Revenue from consumers, Dell's smallest customer segment in the quarter, increase 4 percent to $3 billion.

In an interview, Dell Chief Financial Officer Brian Gladden said the company expects to see similar slow growth through the quarter.

Desktop and laptop computers made up about 56 percent of Dell's revenue in the quarter. PCs are less profitable than Dell's technology consulting services and other smaller slices of Dell's business, but the company still managed to improve gross margin - a measure of profitability - by keeping costs from rising too sharply.

The company said low component costs helped margins in the quarter, as did "pricing discipline" - not cutting prices too deeply to attract buyers.

For the fiscal third quarter, which ended Oct. 29, Dell's jumped to $822 million, or 42 cents per share, from $337 million, or 17 cents per share.

Excluding items, Dell earned 45 cent per share.

Analysts surveyed by Thomson Reuters expected Dell to earn much less - 32 cents per share.

Revenue jumped 19 percent to $15.4 billion from $12.9 billion, slightly less than the $15.8 billion analysts predicted.

For the full fiscal year, which ends in January, Dell said it expects revenue around the midpoint of its earlier guidance for an increase of 14 percent to 19 percent from last year. That would put fiscal 2011 revenue at about $62 billion. Analysts are currently predicting $62.4 billion.

Gladden also shot down rumors that Dell is contemplating taking the company private.

Shares of Dell, which is based in Round Rock, Texas, rose 79 cents, or 5.7 percent, to $14.45 in extended trading. Earlier in the day, shares added 31 cents, or 2.4 percent, to close at $13.66.

Explore further: Why the Sony hack isn't big news in Japan

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Dell fiscal 1Q net income jumps 52 percent

May 20, 2010

(AP) -- Computer maker Dell Inc. said Thursday its first-quarter net income rose 52 percent, helped by sales of computers to businesses and technology services to public-sector customers.

Dell 2Q net income rises 16 percent

Aug 19, 2010

(AP) -- PC maker Dell Inc. said Thursday that its net income improved 16 percent in the most recent quarter, though a key measure called gross profit margin fell.

Dell: PC demand stable stabilizing

Jul 13, 2009

(AP) -- PC maker Dell Inc. said Monday it expects its fiscal second-quarter revenue to be slightly higher than in the first quarter, when sales plunged 23 percent to $12.3 billion.

Dell's profit, stock drop on weak quarterly report

Nov 19, 2009

(AP) -- Some of the computer-industry's biggest players - such as IBM Corp., Intel Corp. and Hewlett-Packard Co. - have wowed Wall Street this fall with stronger-than-expected profits.

Recommended for you

Why the Sony hack isn't big news in Japan

10 hours ago

Japan's biggest newspaper, Yomiuri Shimbun, featured a story about Sony Corp. on its website Friday. It wasn't about hacking. It was about the company's struggling tablet business.

Sony faces 4th ex-employee lawsuit over hack

15 hours ago

A former director of technology for Sony Pictures Entertainment has sued the company over the data breach that resulted in the online posting of his private financial and personal information.

Sony tells AFP it still plans movie release

16 hours ago

Sony Pictures boss Michael Lynton denied Friday the Hollywood studio has "caved" by canceling the release of "The Interview," and said it still hoped to release the controversial film.

2012 movie massacre hung over 'Interview' decision

Dec 19, 2014

When a group claiming credit for the hacking of Sony Pictures Entertainment threated violence against theaters showing "The Interview" earlier this week, the fate of the movie's big-screen life was all but ...

Clooney slams skittish Hollywood after Sony hack

Dec 19, 2014

Film star George Clooney slammed the Hollywood movie industry for failing to stand up against the cyber threats that prompted Sony Pictures to cancel release of the movie "The Interview."

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.