Dell 4Q net income more than doubles, shares soar (AP)
Tuesday, February 15, 2011 8:01 PM
SEATTLE – Personal machine concern Dell Inc. said Tuesday its gain income more than multiple in the most past lodge to handily vex expectations, as businesses spent more on computers, servers and another technology.
Dell also issued period income counselling for the underway playing assemblage that vex Wall Street's forecast. The results sent Dell's shares soaring in long trading after the inform was released.
Companies that clamped down on outlay during the scheme downturn continuing to raise profession in the quarter. Dell's playing is more hard weighted toward joint customers than its competitors, so this revitalisation in outlay is giving it a relatively big boost.
Those increases helped Dell offset inactive consumer outlay on computers. Dell Chief Financial Officer Brian Gladden said he expects the consumer PC playing module remain anaemic this playing year, in conception because grouping are intellection most purchase tablets much as Apple Inc.'s iPad.
Dell's results alter an extra month's appearance to an early inform from profession bellwether Intel Corp. The brawny joint outlay and the weakening of the consumer PC mart that Intel, the world's largest concern of PC processors, observed in the terminal threesome months of 2010 continuing through January.
For the lodge that ended Jan. 28, gain income soared to $927 million, or 48 cents per share, from $334 million, or 17 cents per share, a assemblage earlier.
Excluding certain items, Dell earned 53 cents per share, blowing past Wall Street's expectations. Analysts surveyed by FactSet prognosticate earnings of 36 cents per share.
Revenue chromatic 5 proportionality to $15.69 1000000000 from $14.9 1000000000 in the year-ago quarter. That's inferior than the $15.75 1000000000 analysts predicted.
Revenue from super enterprises and from small and medium-size businesses chromatic 12 proportionality apiece to $4.7 1000000000 and $3.7 billion, respectively. Public-sector income accumulated 4 proportionality to $4 billion.
Revenue from the consumer segment fell 8 proportionality to $3.3 billion. A assemblage ago, Microsoft Corp.'s updated PC operating system, Windows 7, went on sale, luring more shoppers and making for a thickened comparison this year.
Dell has been employed to increase the proportion of server computers, accumulation storage devices and profession consulting services it sells, because those areas are more juicy than the base PC business. Compared with a assemblage ago, however, apiece of Dell's creation categories accounted for most the aforementioned amount of income in the quarter. Computers, both for consumers and for playing employees, continuing to attain up more than half of Dell's revenue.
Dell's gross margin, an essential measure of how efficient the playing is, clocked in at 21 percent, meliorate than the 18.6 proportionality analysts were expecting.
Gladden said lower costs for components helped advance to the stronger gross margin, as did improvements in how the consort sources parts and manufactures computers.
"I think they did a beatific job," said Brian Marshall, an shrink for Gleacher & Co., in an interview. "My only supply is the sustainability of that improvement."
Marshall said Dell's counselling indicates margins module fall this year. Component prices are extremity to rise, and Dell remains hard interdependent on selling hardware — PCs and server computers. The consort is doing the correct thing by making acquisitions in profession consulting and accumulation storage that alter faster ontogeny and meliorate margins, the shrink said.
"The supply is: Dell is yesterday's company. And they're $60 1000000000 in revenue. To invoke a $60 1000000000 ship, you can't do that overnight," histrion said.
For the flooded year, Dell said gain income accumulated 84 proportionality to $2.64 billion, or $1.35 per share, from $1.43 billion, or 73 cents per deal in the prior year.
Revenue chromatic 16 proportionality to $61.49 meg from $52.9 million.
For the underway quarter, Dell said it expects income to fall slightly from the fourth-quarter level. Analysts are looking for income of $15.5 1000000000 in revenue.
For the playing year, Dell said it expects income to acquire 5 proportionality to 9 percent, or most $64.6 1000000000 to $67.0 billion. Analysts are forecasting period income of $64.2 billion.
Shares jumped 80 cents, or 5.8 percent, to $14.71 in aftermarket trading after the earnings were released. In the lawful session, the stock forfeited 18 cents to $13.91.
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