Dell's Fiscal 2013 Earnings Disappoint
May 23, 2012 10:00 AM
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Dell predicts modest growth for Q2
The computer market is showing signs of improvement after the significant downturn in the economy around the world over the last few years. The poor economy hit Dell hard as noted in the firm's fiscal 2013 first-quarter financial results announced this week. Dell managed to earn a scant $.36 per share on GAAP earnings and $.43 per share for non-GAAP earnings.
“We’re committed to continuing our strategy to re-shape Dell’s business as an end-to-end IT provider,” said Michael Dell, chairman and CEO. “We saw continued progress in our first quarter with the innovative IT solutions we’re providing – notably our latest Dell servers, storage, networking and services that deliver customers enhanced productivity.”
Revenue for the quarter was $14.4 billion, which is down 4% from the same quarter of the previous year. It's worth noting that the economy was even more sluggish in the same quarter of fiscal 2012. That $.36 per share GAAP earnings represents a 27% decline from the previous year and the non-GAAP earnings are a 22% decline from the previous year.
“We continued to shift the mix of our business during a challenging environment,” said Brian Gladden, Dell chief financial officer. “Our enterprise solutions and services businesses now account for 50 percent of our gross margin, and we’ll continue to make the necessary investments to maintain our progress.”
GAAP operating income for Dell during the quarter was $824 million accounting for 5.7% of revenue with non-GAAP operating income of $1 billion making up 7% revenue. Dell generated $4.9 billion in cash flow and ended the quarter with $17.2 billion in cash and investments.
Dell says highlights for the quarter were its enterprise solutions and services division that grew revenue 2% year-over-year to $4.5 billion. That division alone contributed half of Dell's gross margin for the quarter. Dell services revenue was up 4% to $2.1 billion and services backlog increased 9% to $15.4 billion. The biggest growth for Dell was in Dell-owned storage with a 24% growth to $423 million. Dell server networking revenue also grew 2%, but the company didn't offer monetary value for the growth.
Dell is looking forward to Q2 of fiscal 2013 and expects revenue to be in line with seasonal trends and grow 2% to 4% compared to Q1 revenue.
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Fiscal 2013 Performance
5/23/2012 12:45:12 PM
Revenue in the quarter was $14.4 billion, a 4 percent decrease from the previous year.
GAAP earnings per share in the quarter was 36 cents, down 27 percent from the previous year; non-GAAP EPS was 43 cents, down 22 percent.
GAAP operating income for the quarter was $824 million, or 5.7 percent of revenue. Non-GAAP operating income was $1 billion, or 7 percent of revenue.
Cash used in operations in the quarter was $138 million. For the past four quarters, Dell has generated $4.9 billion in cash flow. Dell ended the quarter with $17.2 billion in cash and investments.
"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997
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