Dell's Q4 better than expected as enterprise holds up, consumer tanks

Dell's Q4 better than expected as enterprise holds up, consumer tanks

Summary: Dell's fourth quarter results topped estimates as the company's enterprise business held up with slight declines. The consumer business took a big hit.

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Dell's fourth quarter results were carried by enterprise gear such as servers and networking, but the consumer business tanked.

The company, which recently announced plans to go private in a leveraged buyout, reported fourth quarter earnings of $530 million, or 30 cents a share, on revenue of $14.31 billion, down 11 percent from a year ago. Non-GAAP earnings in the fourth quarter were 40 cents a share.

Wall Street was expecting fourth quarter earnings of 39 cents a share on revenue of $14.12 billion.

For fiscal 2013, Dell reported earnings of $2.37 billion, or $1.35 a share, on revenue of $56.94 billion, down 8 percent from a year ago.

In a statement, Dell CFO Brian Gladden said that software acquisitions, notably Quest, fueled better-than-expected revenue.

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Dell declined to provide an outlook for the first quarter or fiscal 2014.

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By unit, Dell reported the following:

  • Large enterprise delivered operating income of $393 million in the fourth quarter on revenue of $4.7 billion, down 7 percent from a year ago. Server revenue was up 25 percent due to hyperscale servers.
  • Public sector revenue was $3.5 billion, down 9 percent from a year ago. Operating income in the fourth quarter fell 25 percent from a year ago to $236 million.
  • SMB sales were $3.4 billion, down 5 percent from the fourth quarter a year ago. Operating income was $385 million.
  • Consumer revenue tanked in the fourth quarter to $2.8 billion, down 24 percent from a year ago. Dell's operating income was $8 million.

Topics: Tech Industry, Dell, Enterprise Software, Hardware, Networking, Servers, Storage

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14 comments
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  • Where was this Growth?

    Pretty much everything was down....

    Dell is toast. And I couldn't be happier.
    itguy10
    • why does this make you happy?

      A lot of people could lose their jobs.
      otaddy
      • Cause Dell has been a Cancer on the Industry

        For a long time and needs to go away.

        They were one of the ones that lead the downard quality/price sprial.

        Someone else will pick up the piecces of Dell.
        itguy10
    • Data source

      If you read the following article it will explain what areas had growth.

      http://www.zdnet.com/dells-q4-better-than-expected-as-enterprise-holds-up-consumer-tanks-7000011515/
      SlithyTove
  • Dell could change things...

    ... Just build and sell PCs / Devices consumers actually want.
    NoAxToGrind
    • The problem with that is that Microsoft doesn't license

      Windows 7 anymore.
      baggins_z
  • Anybody Still In Denial Over The Post-PC Era?

    Consumer desktop sales down 14% YOY, from one of the three largest PC makers in the world. Need I say more?
    ldo17
    • Of course people remain in denial

      But it should be pointed out that Lenovo and Asus have been able to grow their business in a very mature industry. In addition to slowing demand, both Dell and HP have lost market share to the rest of the industry. Perhaps they're not trying, perhaps they're unable to compete. Whatever the explanation, both Dell and HP have underperformed the industry for some time now. Dell sold less computers last quarter than they did is the same quarter in 2005.
      Info Dave
      • Re: But it should be pointed out that Lenovo and Asus have been able to gro

        Not sure about Asus, but Lenovo's net profit margins have been around 1.8% lately, and similar with Acer. With HP losing money, and Dell's sales shrinking like this, does that sound like a business with growth prospects to you?
        ldo17
    • Replacement PC Era

      I still find it rare to find people who don't use PCs anymore. They just use them less for certain tasks.

      What I do see is that my three year old desktop is still faster than all but the highest end desktops available for sale today. I used to be on a two-year upgrade cycle and have no reason at all to buy or even want a new system right now.

      - All of the speed and power innovations are going into mobile at the moment allowing existing systems to stay current longer
      - Newer software is being reworked to be more efficient. New computing needs requiring more horsepower have not recently hit PCs
      - PC gaming performance is held back by the unusual longevity of the xbox360 and PS3
      - PCs have achieved saturation in the developed world

      Because of this, for the time being, it is acting just like a replacement market. But all of those could change quickly.

      Mobility on the other hand is technologically advancing by leaps and bounds every year. It makes sense for a strapped middle class to spend their money on mobility.

      The line is getting pretty blurred anyway. Post-pc will mean nothing shortly. Is a Surface Pro post-pc? How about an Ubuntu phone? Or a chromebook?
      SlithyTove
      • Re: I still find it rare to find people who don't use PCs anymore.

        Well, considering there are only about a billion PCs or so in active use, and getting close to 7 billion people in the world...
        ldo17
        • First world, granted

          Cars and trucks have been a replacement model for a long time, but there are roughly only a billion of those operating as well.

          There is still growth in the developing world, but not everywhere has the infrastructure, money, or education to have a use for them for a while.

          It is interesting to watch places like Africa though which often lack the infrastructure for traditional tech. Feature phones are probably the most dominant "computing" type. I could see them bypassing PCs all together for ultra-lower power tablets that can run off small solar rigs.
          SlithyTove
          • Re: Cars and trucks have been a replacement model for a long time

            But look at the number of different companies making cars and trucks, versus the number making PCs: the former is much larger than the latter, though the latter have much larger volume shipments. Cars and trucks are a lot more expensive than PCs, and companies can make a tidy profit selling a lot fewer of them. And there is no Intel or Microsoft holding a monopoly on the supply of an essential part, and demanding permission before you can try new ideas.

            In other words, watch out for dubious economic analogies.
            ldo17
  • Dell's not so bad...

    About 15-20 years ago, I started buying from Dell because after checking around, they had the best deals. I've never had a problem with the quality of their computers. Every time I've been in the market for a new computer, I check around again and always end up with Dell.

    I'm using a Dell 17" Inspiron that was about $700 and I love it. I've got two Dell 24" monitors hooked up to it and they've been great too.
    nfordzdn