Dell's Revenue Flat, but Profits Are Up

By Chris Preimesberger  |  Posted 2011-11-16 Print this article Print

Despite a level-off in sales, Dell increased its net income by 9 percent to $893 million.

Michael Dell told eWEEK last August that his company is steering more aspects of the business toward the higher-margin enterprise markets. That strategy apparently is starting to make a difference on the bottom line.

Dell on Nov. 15 posted profits that were up 9 percent over the same period a year ago, despite banking only a small decrease in revenue. The company's third quarter fiscal year 2012 earnings report showed it brought in $15.4 billion, relatively flat from 2010.

However, despite the level-off in sales, Dell increased its net income by 9 percent to $893 million.

The Austin, Texas-based company missed its Wall Street consensus revenue target, but its gross margin came in substantially higher at 23 percent against an expectation of 22.5 percent. The company has executed better than expected in the face of HDD shortages due to flooding of manufacturing facilities in Thailand.

Enterprise Sales Up 13 Percent in Quarter

On the earnings teleconference, Dell executives said that enterprise hardware, software and services comprised 31 percent of its total revenue. Dell also said income from sales of servers and networking equipment grew 13 percent.

"Consistent with our strategy and the investments we have made, we continued to see excellent momentum in our enterprise business, with double-digit revenue growth in services, servers and networking, and in key growth countries, despite some macroeconomic uncertainty," CFO Brian Gladden said.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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