Dell: Still a work in progress; Sees conservative IT spending
Dell's fourth quarter results fell short of expectations Thursday and the company "will continue to incur costs as it realigns its business to improve growth and profitability." Meanwhile, Dell said future results "could be adversely impacted by more conservative spending by its customers."
Simply put, Dell is still a work in progress and it's unclear when the company will be firing on all cylinders. For the quarter ending Feb. 1 (preview, Dell statement), Dell said net income was $679 million, or 31 cents a share, on revenue of $16 billion. Excluding charges Dell had earnings of 34 cents a share.
According to Thomson Financial, Dell was expected to report fourth quarter earnings of 36 cents a share with revenue of $16.26 billion. Some analysts had expected Dell to miss estimates with earnings of 35 cents a share, but Dell missed that target too.
For the year, Dell reported earnings per share of $1.31 a share on revenue of $61.1 billion, up 6 percent from a year ago. In a statement, CEO Michael Dell said the company is executing against its plan. However, thus far those plans aren't enough to deliver the results Wall Street wants.
Here's the fourth quarter by the numbers:
- Dell has laid off 3,200 workers over the last eight months;
- Sales outside the U.S. represented 49 percent of the company's sales. So called BRIC countries (Brazil, Russia, India and China) had revenue growth of 36 percent.
- Notebook revenue was up 24 percent to $4.8 billion with unit shipments up 37 percent. Services revenue was up 7 percent to $1.4 billion.
- But servers and networking revenue was up 2 percent from a year ago to $1.6 billion. Storage revenue was up 2 percent from a year ago at $600 million. Desktop PC revenue was up 2 percent to $4.9 billion. Software and peripherals revenue was up 15 percent from a year ago to $2.7 billion.
- Days supply of inventory was 8.
- Dell ended the quarter with a total headcount of 88,200 of which 82,700 were full-timers.