Dell reported third quarter earnings of $766 million, or 34 cents a share, on revenue of $15.6 billion amid strong demand for notebooks. CEO Michael Dell said the PC maker is hoping to generate "product lust" with better designs to grow.
In a statement Thursday, Michael Dell said the company is "making solid progress" on its business priorities of focusing on the consumer, emerging markets, notebooks, enterprise and SMB. As for technology spending, Dell said that there was some caution at financial services customers, but "overall demand has been good."
Dell (all resources) held its first conference call--a 90 minute strategy session--in a year. On the call, Dell laid out its current state and where it sees itself headed. Michael Dell said the company plans on being a leading consumer brand, grow abroad and simplify the enterprise IT experience.
A good chunk of time on the call was spent on Dell's consumer strategy, which the company hopes will spark growth. Dell is hoping to generate some "product lust." "We're focused on product lust across our global brands," said Dell.
By the numbers:
Overall, analysts on the call seemed concerned about Dell's plans to invest in the business and potentially raise capital spending plans. There were also questions about Dell's headcount, which hasn't come down. Donald Carty, CFO of Dell, said the company is looking to automate more roles and is examining positions in various units. Carty noted that to expand in key areas Dell will have to increase operating expenditures.
Analysts tried to nail down Dell on its commitment to lowering headcount to no avail. The company had said it would lower headcount by 10 percent a year. Carty said that goal is still there with caveats as the company tries to expand into new markets.
Meanwhile, Dell didn't provide much of an outlook much to the chagrin of analysts. Bear Stearns analyst Andy Neff asked Carty: "How will we know how you are doing?" The response more or less: Dell doesn't do guidance. Here's the company's official outlook:
The company continues to focus on strategic priorities that will provide better value to customers while driving a more optimal balance of liquidity, profitability and growth. As the company executes against these priorities it will continue to incur costs as it restructures to improve productivity and execution, reduce headcount where appropriate, and invest in infrastructure and acquisitions. These actions, which the company believes are necessary to drive long-term sustainable value, may adversely impact the company’s performance. In addition, the company’s near term results could be adversely impacted by a slower decline in component costs and a seasonal shift in mix to
U.S.consumer and international regions.
Translation: Dell still has a lot of work to do.