Dell Profits Up 52% On Strong Business Sales - InformationWeek
Infrastructure // PC & Servers
12:35 AM

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.

Comment  | 
Print  | 
More Insights
Threaded  |  Newest First  |  Oldest First
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of the Cloud Report
As the use of public cloud becomes a given, IT leaders must navigate the transition and advocate for management tools or architectures that allow them to realize the benefits they seek. Download this report to explore the issues and how to best leverage the cloud moving forward.
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on for the week of November 6, 2016. We'll be talking with the editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll