Hi Kemble, here's an article that summaries the highlight's of the cc. I'm sure this is "old" information by now, but thought it might be useful to sell all the information in one article.
NEW YORK, May 11 (Reuters) - Dell Computer
(NasdaqNM:DELL - news) on Thursday reported first-quarter
earnings that showed a 31 percent increase in revenues and
earnings that topped estimates.
The following are highlights from comments by Dell Chief Financial Officer Jim Schneider:
SALES DEMAND ON TRACK, REITERATES FINANCIAL GROWTH TARGETS
-- ``Demand is tracking right in line with our expectations and consistent with the guidance we gave you (previously),'' Schneider said. ``Our revenue goals and expectations on the
balance of the year remain unchanged.''
-- ``For Q2 (second quarter) specifically, the normal seasonal pattern appeared intact. Over the past five years our sequential growth has averaged 8 percent from Q1 to Q2.''
-- supplies of microprocessors from Intel Corp. (NasdaqNM:INTC - news) Dell uses to build its PCs remain tight in the second quarter, but appear adequate to meet demand.
-- Among ``big business'' customers, who cut back on purchasing PCs in late 1999 and early this year to brace for the Year 2000 computer bug transition, spending bounced back in February, March and April, when the quarter ended. Claimed to win 70 to 80 percent of the enterprise contracts on which it competes. FIRST QUARTER BUSINESS SEGMENT
GROWTH MEASURES
-- Revenues from medium and large enterprise business customers, which account for more than two-thirds of Dell's overall business, grew 24 percent.
-- Revenue in Dell's less significant consumer and small business unit grew 64 percent year over year.
-- Revenue from ``Internet infrastructure markets'' -- a loosely defined market in which Dell equips companies to run Internet businesses, grew 59 percent.
-- Storage systems sold separately from its core computer products are now selling at an annual ``run-rate'' of $1 billion plus, which means that if Dell keeps growing at its current rate, it would generate more than $1 billion a year out.
-- Notebooks now account for 30 percent of Dell's hardware systems revenues. The company boasted that it ranks No. 1 in the worldwide commercial notebook market and No. 2 overall.
-- Desktop PC sales account for just 52 percent of total sales, down from 61 percent a year ago, in keeping with Dell's goal to move out of the commdity-like desktop business in favour of higher margin servers, notebooks, storage and services.
-- Total revenue per average unit sold rose to $2,300 from $2,250 in the fourth quarter and flat vs. the 1999 first quarter.
-- The new dellhost.com business, which helps companies manage their Internet businesses, has signed up 2000 customers in the first two months since it was introduced. Roughly 50 percent of these customers are choosing Linux as the operating system used to run their businesses. OPERATING MARGINS SEEN IMPROVING, INVESTMENT GAINS GROWING
-- Operating margins face both positive and negative pressures. Its Internet thrust is boosting sales of higher-margin enterprise products, while it is benefiting from the growing economies of scale in its manufacturing and administrative operations. But component costs ``remain somewhat volatile'' and Dell must continue to make big investments in its Internet efforts, both externally and internally.
-- Overall, operating margins should rise to 9 percent for the year overall, up from 8.6 percent in the first quarter, with better than 10 percent operating margin expected in the
fourth quarter of 2000.
-- gross margin improved to 20.5 percent from 19.2 percent resulted from increased sales of higher margin products such as servers, storage, notebooks and services and from lower
than-expected costs for computer memory components.
-- ``You should however model a higher level of gains for sales of investments going forward,'' he told analysts. ``Our financing and other income line will approximate $100
million per quarter for the balance of this year.''
Dell sure pulled it off for the quarter...great job on MD's part.
Stock Bull |
