Dell’s Continued Strong Growth Outside U.S. Drives Company To Record Q1 Revenue
Product shipments for the period ended April 30 were up 25 percent from the same quarter a year ago; volumes for the rest of the industry increased 14 percent. Dell growth was 38 percent in Asia-Pacific and Japan, where the company's share ranked No. 2 for the first time. Shipments in Europe, the Middle East and Africa increased 37 percent.
First-quarter company revenue was up 21 percent to $11.5 billion, higher than Dell's previous guidance. The company has now met or exceeded guidance to investors for 13 straight quarters. Net earnings were $731 million, or 28 cents per share, 22 percent higher than a year ago. Dell's growth in both product shipments and net income has surpassed 20 percent for seven consecutive quarters.
”In our industry, only Dell simultaneously creates great customer value, rapid growth and solid profitability”, said Kevin Rollins, the company's president and chief operating officer. ”Others sometimes do one or two of those things. Our global team and our shareholders insist on all three.”
First-quarter operating income was $966 million, up 19 percent from a year ago despite higher-than-expected costs for random-access memory late in the quarter. Operating expenses as a percent of revenue were 9.6 percent, matching a company low and better than 9.8 percent last year.
Dell generated $1.0 billion in cash from operations during the quarter. Cash and investments at the end of the period totaled $11.9 billion, as the company spent $1.1 billion to repurchase its common stock-up from a planned $600 million at the start of the quarter.
For the fiscal second quarter, Dell anticipates year-over-year growth in product shipments of 24 percent. Such volumes are expected to produce revenue of about $11.7 billion, up 20 percent, and per-share earnings of 29 cents, a 21-percent increase.
EMEA, Asia-Pacific and Japan Highlight Regional Growth
In Europe, the Middle East and Africa, Dell's growth was broadly based, and nearly double the combined rate of other companies. Dell product shipments were up at least 33 percent in 14 countries, faster in the top three national markets: the United Kingdom, France and Germany.
Shipments of PowerEdge servers in the U.K. jumped 39 percent. Dell gained more than three points of server share in the market, to 32 percent, while the industry leader lost five share points.
The company's total growth in Asia-Pacific and Japan was more than three times the 11-percent average of the rest of the industry. Dell China product shipments were up 48 percent. In Japan, the company rate was 24 percent, nearly four times that of the industry excluding Dell.
Dell server volumes in Asia-Pacific and Japan increased 33 percent, almost twice the average of other companies. Dell Japan ranked No. 1 in shipments of standards-based servers for the first time. Already No. 1 in servers in China, Dell now is the top supplier in that product category in the region's two largest markets.
Dell again scored highly in a major Japanese customer-satisfaction survey, ranking first in after-sale service among personal-computer companies for the fourth straight year in research conducted by a leading business publication.
Shipments of Dell products in the United States rose 18 percent as Dell added two full points to its leading market-share position. Demand from small and medium businesses and consumers was particularly strong, and information-technology spending by large corporate customers continued to improve.
The company's Americas business outside the U.S. was up 24 percent, including a 26-percent volume increase in Canada.
Server Shipments Exceed Industry Rate; Notebook Shipments Up 39 Percent
Dell's 24-percent growth in server volumes was markedly ahead of the average of other companies. Revenue from Dell/EMC storage systems rose 25 percent, as the company focuses its sales efforts around midrange storage-area networks.
During the quarter, the company introduced a new generation of storage systems, along with services and online tools to further simplify storage-area networks. Dell also announced expansions of its relationships with Oracle Corp. and SAP A.G. to make it easier for customers to acquire and use business-critical computing applications from those companies on Dell servers.
First-quarter revenue from software and peripheral products was up 39 percent, helped by strong demand for Dell printers. The company's initial U.S. market-share growth in printers is more rapid than in any new product category in Dell history: in just one year, the company has share of more than 10 percent in inkjet printers, and in the upper teens in all-in-one printers.
Dell already sells printers in selected European and Asian markets, and will introduce its first such products in Japan during the second quarter. The company plans to launch several new printers in the U.S. in the next few weeks.
First-quarter shipments of Inspiron and Latitude notebook computers soared 39 percent, 12 points faster than category shipments for the rest of the industry. Volumes of the company's Dimension and OptiPlex desktop computers were up 21 percent, more than double the rate of the industry excluding Dell.
Dell Inc. (NASDAQ: DELL) is a premier provider of products and services required for customers worldwide to build their information-technology and Internet infrastructures. Company revenue for the past year totaled $43.5 billion. Dell, through its direct business model, designs, manufactures and customizes products and services to customer requirements, and offers an extensive selection of software and peripherals. Information on Dell and its products can be obtained www.dell.com.
Special note: Statements in this press release that relate to future results and events (including statements about fiscal second-quarter financial and operating performance) are based on the company's current expectations. Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, including general economic and business conditions; the level of demand for the company's products and services; the level and intensity of competition in the technology industry and the pricing pressures that have resulted; the company's ability to timely and effectively manage periodic product transitions, as well as component availability and cost; the company's ability to develop new products based on new or evolving technology and the market's acceptance of those products; the company's ability to manage its inventory levels to minimize excess inventory, declining inventory values and obsolescence; the product, customer and geographic sales mix of any particular period; the company's ability to effectively manage its operating costs; and the effect of armed hostilities, terrorism or public health issues on the economy generally, on the level of demand for the company's products and services and on the company's ability to manage its supply and delivery logistics in such an environment. Additional discussion of these and other factors affecting the company's business and prospects is contained in the company's periodic filings with the Securities and Exchange Commission.
Consolidated statements of income, financial position and cash flows follow.
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