Dell Beats Wall Street Estimates in Q3 | eWeek

Dell Beats Wall Street Estimates in Q3

Written By
Scott Ferguson
Scott Ferguson
Nov 21, 2006
2 minute read
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Despite a delay of almost a week, Dell released its fiscal third-quarter results on Nov. 21 and beat Wall Street estimates with a net income of $667 million.

For the fiscal quarter that ended Nov. 3, the Round Rock, Texas PC maker posted revenue of $14.38 billion, a 3.5 percent increase from last year, and earnings per share of 30 cents or an increase of about 12 percent from last year, when income stood at $606 million or 25 cents a share

Analyst at Thomson First Call had estimated that Dell would earn 24 cents a share in the third quarter.

Dell had been scheduled to deliver its quarterly results on Nov. 16, the same day as rival Hewlett-Packard, but delayed those results at the last minute.

The company said it encountered additional complications in calculating the numbers due to an investigation by the U.S. Securities and Exchange Commission.

On Nov. 21, Dell added that the SEC is continuing its investigation “into certain accounting and financial reporting matters, including the possibility of misstatements in prior period financial reports.”

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Dell also mentioned the subpoena it has received from the U.S. Attorneys Office for the Southern District of New York. Dell has not filed its official financial statements for the second and the third quarter this year.

The company released its official numbers without additional comment and offering no forward-looking financial statements for the fourth fiscal quarter.

According to Thomson, analysts are predicting profits of 28 cents a share and revenue of $15.6 billion.

In a statement, Dell said its profits were due in part to a strengthened product line, better customer experience and growth outside the U.S. market.

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In the North American and South American markets, Dell earned $9.2 billion revenue, which was a drop of 4.4 percent from a year ago.

In Asia, the company saw revenue of $1.9 billion, a 23 percent increase. In Europe, revenue stood at $3.3 billion, a nine percent increase.

In the last several months, Dell has launched several products, including desktops and notebooks, that use Advanced Micro Dynamics processors. The company said that it had started to receive customer feedback from its PowerEdge servers that use AMDs Opteron processors.

Dell has also launched servers that use Intels new quad-core processor.

For the quarter, Dell saw its server business earn $1.5 billion and its storage unit earn $577 million. The companys notebooks earned Dell $3.9 billion in revenue, a 17 percent increase, while desktop revenue fell to $4.7 billion or a five percent decrease.

Dells services revenue hit $1.4 billion, the company said in its statement.

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