Dell Profits Up 52% On Strong Business Sales - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Infrastructure // PC & Servers

Dell Profits Up 52% On Strong Business Sales

The computer maker reported a 38% rise in revenue from servers, storage, and services sold to businesses and increased sales across all its customer segments.

Dell, which has struggled more than Hewlett-Packard and other rivals in weathering the economic recession, has reported a 52% jump in profits in the first fiscal quarter, as businesses ramped up spending on PCs.

The computer maker on Thursday reported that net income for the quarter ended April 30 rose to $441 million, or 22 cents a share, from $290 million, or 15 cents a share, the same period a year ago. Revenue increased 21% to $14.9 billion from $12.3 billion a year ago. Dell's results were ahead of Wall Street analysts polled by Thomson Reuters.

A key driver behind Dell's performance was a 38% increase in revenue from servers, storage and services sold to businesses. During the recession last year, companies delayed PC purchases, which hurt Dell more than HP and other competitors that managed to make up some of the shortfall with consumer sales.

This time around, however, Dell reported increased sales across all its customer segments, led by large enterprises, 25%; and government, 22%. Consumer sales were up 16% and revenue from small and medium-sized businesses rose 19%.

"This quarter was highlighted by good execution in an improving economic environment," Brian Gladden, chief financial officer for Dell, said in a statement. "We feel good about the growth across our commercial business as it approaches nearly $50 billion in revenues. We will continue to make investments in our enterprise solutions throughout the year."

Looking to the second fiscal quarter, Dell said it believes corporations are in the "early stages" of replacing aging servers, desktops and laptops The company saw demand build in the first fiscal quarter and was "optimistic" the trend would continue throughout the year.

Dell expected higher sales from its government, consumer and education businesses in the second fiscal quarter, said demand from large companies in the U.S. and Europe is typically lower in the second and first part of the third fiscal quarters.

Overall, Dell forecast a revenue increase quarter-to-quarter in the low single digits in the second fiscal quarter.

Dell reported earnings two days after HP said profits in the April quarter rose 28% year-to-year to $2.2 billion, or 91 cents a share, as revenue grew 13% to $30.8 billion. HP also reported increased spending on PCs by consumers and businesses in an improving economy.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Slideshows
10 Ways to Transition Traditional IT Talent to Cloud Talent
Lisa Morgan, Freelance Writer,  11/23/2020
News
What Comes Next for the COVID-19 Computing Consortium
Joao-Pierre S. Ruth, Senior Writer,  11/24/2020
News
Top 10 Data and Analytics Trends for 2021
Jessica Davis, Senior Editor, Enterprise Apps,  11/13/2020
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
Why Chatbots Are So Popular Right Now
In this IT Trend Report, you will learn more about why chatbots are gaining traction within businesses, particularly while a pandemic is impacting the world.
Slideshows
Flash Poll