Dell Reports
First Quarter Financial Results
·
Revenue
of $14.4 billion
·
GAAP
Earnings of $0.36 per share, non-GAAP earnings was $0.43 per share
·
Dell Enterprise Solutions and Services revenue grew
2 percent year over year to $4.5 billion
ROUND
ROCK, Texas, May 22, 2012 – Dell announced its fiscal 2013 first quarter results today, continuing to
show progress in its move to being a total enterprise services and solutions
provider. Revenue for the quarter was $14.4 billion, with GAAP operating income
of $824 million, and earnings of $0.36 per share.
“We’re committed to continuing our strategy
to re-shape Dell’s
business as an end-to-end IT provider,” said Michael Dell, chairman and CEO. “We saw continued progress in our first quarter
with the innovative IT solutions we’re providing – notably our latest Dell
servers, storage, networking and services that deliver customers enhanced
productivity.”
“We continued to shift the mix of our business during a
challenging environment,” said Brian Gladden, Dell chief financial officer.
“Our enterprise solutions and services businesses now account for 50 percent of
our gross margin, and we’ll continue to make the necessary investments to
maintain our progress.”
Results
·
Revenue in the
quarter was $14.4 billion, a 4 percent decrease from the previous year.
·
GAAP earnings
per share
in the quarter was 36 cents, down 27 percent from the previous year; non-GAAP EPS was 43 cents, down 22
percent.
·
GAAPoperating
income
for the quarter was $824 million, or 5.7 percent of revenue. Non-GAAP operating income was $1
billion, or 7 percent of revenue.
·
Cash used in
operations
in the quarter was $138 million. For the past four quarters, Dell has generated
$4.9 billion in cash flow. Dell ended the quarter with $17.2 billion in cash
and investments.
Fiscal-Year
2013 First Quarter Highlights
First Quarter
(in millions) FY13 FY12 Change
Revenue $14,422 $15,017 (4)%
Operating Income (GAAP) $824 $1,212 (32)%
Net Income (GAAP) $635 $945 (33)%
EPS (GAAP) $0.36 $0.49 (27)%
Operating Income (non-GAAP) $1,010 $1,376 (27)%
Net Income (non-GAAP) $761 $1,050 (28)%
EPS
(non-GAAP) $0.43 $0.55 (22)%
Information about Dell’s use of non-GAAP financial information is
provided under “Non-GAAP Financial Measures” below. Non-GAAP financial
information excludes costs related primarily to the amortization of purchased
intangibles, severance and facility-action costs, and acquisition-related
charges. All comparisons in this press release are year over year unless
otherwise noted.
Strategic Highlights:
·
Dell Enterprise Solutions and Services revenue grew 2 percent year over year to $4.5 billion and contributed
half of Dell’s gross margin. The ESS revenue grew 5 percent excluding
third-party storage.
·
Dell Services revenue was $2.1 billion, up 4 percent. Services
backlog increased 9 percent to $15.4 billion.
·
Dell-owned storage grew 24 percent to
$423 million.
·
Server and networking revenue grew 2
percent.
Business
Units and Regions:
·
Large
Enterprise revenuewas
$4.4 billionin the quarter, a 3 percent decline. Operating income for the
quarter was $402 million, or 9.1 percent of revenue.
·
Public revenue was
$3.5 billion, a 4 percent decrease. Operating
income for the quarter was $271 million, or 7.8 percent of revenue.
·
Small and
Medium Business
revenue grew 4 percent to $3.5 billion. Enterprise Solutions and Services
revenue increased 17 percent, led by services revenue growth of 23 percent and
servers and networking of 16 percent. SMB had
$389 million in operating income, or 11.2 percent of revenue.
·
Consumer revenue was
$3 billion, a 12 percent decline. Operating income was $32 million or 1.1
percent of revenue.
·
Asia-Pacific
and Japan
revenue was flat but China increased
9 percent. EMEA revenue was down 1
percent in the quarter. Americas was
down 7 percent. Revenue in the BRIC countries increased 4 percent.
Company
Outlook:
The company expects second quarter revenue to
be in line with historical seasonal trends and be up 2-4 percent from
first-quarter levels.
About
Dell
Dell Inc.
(NASDAQ: DELL) listens to
customers and delivers worldwide innovative technology, business solutions and
services they trust and value. For more information, visit www.dell.com. As previously announced, the
first-quarter analyst call with Michael Dell, chairman and CEO; Brian Gladden, CFO; and, Steve Felice, Chief
Commercial Officer, will be webcast live today at 4:00 CDT and archived at www.dell.com/investor.To monitor highlighted facts from the analyst call, follow
on the Dell Investor Relations Twitter account at: http://twitter.com/dellsharesor
hashtag#DellEarnings.
To communicate directly with Dell, go to www.dell.com/dellshares.
Segment
Realignment:
In the first
quarter of Fiscal 2013, Dell made certain segment realignments in order to
conform to the way Dell internally manages segment performance. These
realignments affected all of Dell's operating segments, but primarily consisted
of the transfer of small office business customers from the Small and Medium
Business segment to the Consumer Segment. Dell has recast prior period amounts
to provide visibility and comparability. None of these changes impacts Dell's
previously reported consolidated net revenue, gross margin, operating income,
net income, or earnings per share.
Non-GAAP
Financial Measures:
This
press release includes information about non-GAAP operating income, non-GAAP
net income, and non-GAAP earnings per share (collectively with non-GAAP gross
margin and non-GAAP operating expenses, the “non-GAAP financial measures”),
which are not measurements of financial performance prepared in accordance with
U.S. generally accepted accounting principles. In the following tables, Dell
has provided a reconciliation of each historical non-GAAP financial measure to
the most directly comparable GAAP financial measure under the heading
“Reconciliation of Non-GAAP Financial Measures” and has presented a detailed
discussion of its reasons for including the non-GAAP financial measures and the
limitations associated with those measures under the heading “Use of Non-GAAP
Financial Measures.” Dell encourages investors to review the reconciliation and
the non-GAAP discussion in conjunction with Dell’s presentation of these
non-GAAP financial measures.
Special
Note on Forward Looking Statements:
Statements
in this press release that relate to future results and events (including
statements about Dell’s future financial and operating performance, trends
relating to mix shift, macroeconomic uncertainty, organic and inorganic
investments and success relating to strategic transformation, as well as the
financial guidance with respect to cash flow from operations, net income and
non-GAAP earnings per share) are forward-looking statements and are based on
Dell's current expectations. In some cases, you can identify these statements
by such forward-looking words as “anticipate,” “believe,” “could,” “estimate,”
“expect,” “intend,” “confidence,” “may,” “plan,” “potential,” “should,” “will”
and “would,” or similar expressions. Actual results and events in future
periods may differ materially from those expressed or implied by these
forward-looking statements because of a number of risks, uncertainties and
other factors, including: intense competition; Dell’s reliance on third-party
suppliers for product components, including reliance on several single-sourced
or limited-sourced suppliers; Dell’s ability to achieve favorable pricing from
its vendors; weak global economic conditions and instability in financial
markets; Dell’s ability to manage effectively the change involved in
implementing strategic initiatives; successful implementation of Dell’s
acquisition strategy; Dell’s cost-efficiency measures; Dell’s ability to
effectively manage periodic product and services transitions; Dell’s ability to
deliver consistent quality products and services; Dell’s ability to generate
substantial non-U.S. net revenue; Dell’s product, customer, and geographic
sales mix, and seasonal sales trends; the performance of Dell’s sales channel
partners; access to the capital markets by Dell or its customers; weak economic
conditions and additional regulation affecting our financial services
activities; counterparty default; customer terminations of or pricing changes
in services contracts, or Dell’s failure to perform as it anticipates at the
time it enters into services contracts; loss of government contracts; Dell’s
ability to obtain licenses to intellectual property developed by others on
commercially reasonable and competitive terms; infrastructure disruptions;
cyber attacks or other data security breaches; Dell’s ability to hedge
effectively its exposure to fluctuations in foreign currency exchange rates and
interest rates; expiration of tax holidays or favorable tax rate structures, or
unfavorable outcomes in tax audits and other compliance matters; impairment of
portfolio investments; unfavorable results of legal proceedings; Dell’s ability
to attract, retain, and motivate key personnel; Dell’s ability to maintain
strong internal controls; changing environmental and safety laws; the effect of
armed hostilities, terrorism, natural disasters, and public health issues; and
other risks and uncertainties discussed in Dell’s filings with the Securities
and Exchange Commission, including its Annual Report on Form 10-K for its
fiscal year ended February 3, 2012. In particular, Dell’s expectations with
regard to cash flow from operations, net income and non-GAAP earnings per
sharefor the full fiscal year ending Feb. 1, 2013 assume, among other matters,
that there is no significant decline in economic conditions generally or demand
growth specifically, that macroeconomic uncertainties do not materialize into
significant economic difficulties, no significant change in product mix
patterns, and continued geographic customer demand trends. In particular,
Dell’s expectations with regard to second quarter revenue amounts assume, among
other matters, that there is no significant decline in economic conditions
generally or demand growth specifically, that macroeconomic uncertainties do
not materialize into significant economic difficulties, no significant change
in product mix patterns, and continued geographic customer demand trends. Dell
assumes no obligation to update its forward-looking statements.
Consolidated
statements of income, financial position and cash flows and other financial
data follow.
Dell is a trademark of Dell Inc. Dell disclaims
any proprietary interest in the marks and names of others.
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Contact
Information
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Media
Contacts: (512) 728-4100
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David
Frink
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Dell
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(512) 728-2678
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Dell
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(512) 728-8295
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Investor
Relations Contacts:
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Robert
Williams
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Dell
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(512)
728-7570
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Michael
McMullen
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Dell
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(512)
724-4448
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David Mehok
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Dell
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(512) 728-4225
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