Dell Fis. Q3 Revenue Rises 22.5%

ROUND ROCK, TEXAS— Despite the stumbling economy and cautious consumer spending, Dell Computer reported record revenue and shipments in its fiscal third quarter.

Revenue increased 22.5 percent in the three months, hitting $9.1 billion, up from $7.5 billion in the year-ago period. Sequential quarterly growth was a more modest 8.1 percent, up from $8.5 billion.

At the same time, Dell said product shipments climbed 28 percent year over year in the third quarter, ended Nov. 1, compared with a 2 percent increase for the remainder of the computer industry.

Michael Dell, chairman/CEO, said fourth quarter company shipments could increase 10 percent during the third quarter, or 23 percent from a year ago. Revenue in the fourth quarter is expected to increase about 20 percent year-on-year, to about $9.7 billion, or about 6 percent over the third quarter.

Net income in the third quarter soared 31 percent, reaching $561 million, up from $429 million in the same period in 2001. Dell said cost reductions, an improved product mix and the lower cost of components played a major role in its profit increase. The sequential increase was 12.1 percent, up from $501 million. Gross profit margin climbed 60 basis points, to 18.2 percent.

Operating income for the third quarter rose 39.3 percent, to $758 million, compared with $544 million in the year-ago three months. The sequential climb was 11.9 percent, up from $677 million.

In the third quarter, desktop computers accounted for 52 percent of Dell revenue, the same as the prior year. The notebook share dropped 1 percentage point in the third quarter, to 28 percent.