| | Dell's Q1 Revenue up 18 Percent, Operating Income up 37 Percent; Profits Outside Americas Nearly Double; Company Expects Continued Strong Shipment, Revenue, EPS Growth in Second Quarter
ROUND ROCK, Texas--(BUSINESS WIRE)--May 15, 2003--Dell (Nasdaq:DELL) reported its best-ever fiscal first-quarter operating results, recording exceptional growth and profitability in all product and regional markets, and said second-quarter increases should also be strong.
Dell worldwide shipments in the quarter ended May 2 were up 29 percent from a year ago; volumes for the rest of the industry declined an average 1 percent. Growth was robust outside the United States -- 40 percent in Asia-Pacific and Japan, and 29 percent in Europe, the Middle East and Africa, as operating income in both regions nearly doubled to record levels.
The company's 40-percent increase in server shipments was more than four times the average of other suppliers. Dell accounted for almost one-third of U.S. server volumes, and has led the category for more than two years. Revenue from external storage systems was up 65 percent.
Dell's first-quarter net earnings totaled $598 million, or 23 cents per share, up from $457 million, or 17 cents per share, for the same period one year ago. Revenue was $9.5 billion, up 18 percent from $8.1 billion.
Dell, Dell's chairman of the board and chief executive officer. "They're recognizing the performance and reliability of standards-based enterprise computing, and choosing such servers and storage products at an accelerating rate.
"Dell's unique ability is innovating, integrating and delivering technology with the best possible value, and our execution in those areas has never been better."
First-quarter operating profit as a percent of revenue was 8.5 percent, Dell's highest in two and one-half years. Operating expenses were a record low 9.8 percent of revenue, down from 9.9 percent a year ago.
Cash and investments at the end of the quarter totaled $10.3 billion, a new high, as Dell generated $812 million in cash from operations. Inventory in dollar terms was 7 percent lower than a year ago, even as company unit volumes rose 29 percent.
For the fiscal second quarter, Dell expects its unit volumes to increase about 25 percent year-over-year, markedly ahead of predicted 3 percent growth for the rest of the industry. Dell anticipates a 15-percent increase in second-quarter revenue, to more than $9.7 billion, and earnings per share of 24 cents, a 26-percent increase.
Company's Competitive Momentum Reaches Worldwide
Dell's shipment growth was exceptional around the globe, especially compared to that of other companies. Excluding Dell, industry volumes were up 1 percent in Asia-Pacific and Japan, and 4 percent in Europe, the Middle East and Africa (EMEA). U.S. shipments for other computer-systems suppliers dropped an average 6 percent.
Strength in EMEA was broadly based, with company volume growth exceeding 30 percent in 10 national markets. Shipments of PowerEdge servers in the region increased 31 percent, more than three times the rate of the rest of the industry. Revenue from external storage systems was up 81 percent.
Dell was the No. 2 computer-systems supplier in France, up from No. 3 a year ago, with 38-percent unit growth. Company shipment growth was 35 percent in the United Kingdom. Dell's server share in the U.K. was 29 percent, and surpassed 20 percent in France for the first time.
In China, now Dell's fourth-largest national market, overall product shipments rose 67 percent, and those of servers more than doubled. Total volumes in Japan rose 36 percent; the balance of the industry was down 9 percent. For all of Asia-Pacific and Japan, Dell server volumes were up 45 percent, four times higher than the rest of the market. Sales of PowerVault and Dell EMC storage products increased 90 percent.
At the same time, the Dell brand name gained further recognition in Japan. Respondents to a survey by a leading national business publication ranked the company No. 1 in after-sale customer service across 11 consumer industries, and atop personal-computing suppliers for the third consecutive year.
In the U.S., Dell's overall market share was nearly six points higher than a year ago. Company server volumes in the country were up 43 percent, more than three times the industry rate without Dell. U.S. storage revenue was 53 percent higher. Shipments to small and medium businesses increased 32 percent; those to U.S. consumers rose 46 percent.
The company's Americas business outside the U.S. was also robust, highlighted by a 77-percent volume increase in Mexico.
Data Storage, Wireless Computing Contribute to Growth
Dell's continued rapid growth in servers is being driven, in part, by increasing demand for high-performance clusters of such systems as powerful, low-cost alternatives to proprietary UNIX platforms for supercomputing applications. In storage, Dell recently began manufacturing the Dell EMC CX200 product worldwide, and introduced new storage-area-network bundles of hardware, software and services for small and mid-sized businesses and institutions.
First-quarter shipments of the company's Inspiron and Latitude notebook computers rose 31 percent, almost three times the rate of industry growth without Dell. During the period, Dell introduced a new line of Latitude notebook computers based on Intel Centrino mobile technology. All Latitude notebooks now include wireless networking capabilities.
Dell shipped a combined 28 percent more Dimension and OptiPlex desktop computers in the most-recent quarter than it did a year ago. Desktop shipments by other companies were down an average of 5 percent.
Technology Business Research Inc. (TBR) again cited Dell for its service and support to corporate information-technology customers. With its latest survey, TBR customers have ranked Dell No. 1 among hardware vendors for all 10 quarters the research has been conducted. Separately, TBR showed Dell as No. 1 in desktop-computer customer satisfaction for the 22nd straight quarter. |
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