informa
/
IT Life
News

Dell Rolls Along

Sales and net income grew by double digits in the third quarter, with gains in virtually every area in which the company has products.
Dell's growth continued unabated across virtually every market in which the company has products. On Thursday, it reported a profit of $677 million, or 26 cents a share, on revenue of $10.62 billion, for its third quarter ended Oct. 31. Profit was up 21% from $561 million in the year-ago quarter, while revenue was up 16% from $9.14 billion.

"We're seeing improved capital spending from the IT environment," CFO Jim Schneider said during the company's earnings call, adding that spending seems particularly strong in the consumer and small-business areas.

One of Dell's strengths for the quarter was the increasingly symbiotic relationship between its server and storage lines. Global server shipments were up 30%, while sales of external storage systems increased 68%. Dell and storage partner EMC Corp. have had 7,000 joint customers worldwide since their relationship began, chairman and CEO Michael Dell said. The company's total revenue from enterprise computing systems was up 32%.

Revenue from software and peripheral products rose 26% in the quarter. Shipments of Dell printers, one of the company's newer offerings, were up nearly 70% from the second quarter, and the company expects sequential growth of more than 80% during the fourth quarter. It also anticipates its fourth-quarter shipments will be up more than 25% year over year, with revenue of $11.5 billion, an increase of 18%, and earnings per share of 28 cents, up 22%.

During the quarter, Dell broadened its portfolio of Intel Itanium-based servers to support the lower end of the chip line, including the 1.0-GHz Deerfield version of the processor. The low-voltage Deerfield cycles slower and includes less on-chip memory than the high-end 1.5-GHz Madison version of Itanium 2 chips, which feature 6 Mbytes of cache memory. In September, Dell also added a key piece to its networking business when it introduced OpenManage Network Manager software for its 3000 and 5000 series PowerConnect Ethernet switches.