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Dell Q4 Profit Soars, Revenue Climbs

2/14/2003 09:14:00 AM Eastern

Round Rock, Texas - Boasting a 38 percent increase in shipments of PCs during the busiest quarter for this segment of the computer business, Dell reported record sales and sharply higher profit for the period ended Jan. 31.

Dell, which claimed a 30 percent share of the U.S. PC market in its fourth quarter, recorded a 20.8 percent increase in consolidated revenue, hitting $9.7 billion, up from $8.1 billion and a 32.4 percent rise in net income, to $603 million, compared with $456 million in the year-ago period.

Operating profit for the fourth quarter climbed a healthy 37.8 percent, reaching $819 million, up from $594 million in the same three months a year ago.

Notebook computers increased overall share of revenue percentage to 26 percent in the fourth quarter, up from 25 percent for the same quarter a year earlier. The company claimed combined shipments of its Inspiron and Latitude notebook computers were up 33 percent, what it said was growth at nearly three times the rate of notebook computer increases for the remainder of the industry.

Desktop overall percentage of revenue, however, dropped 2 percentage points in the three months, down to 55 percent, compared with the fourth quarter in 2002.

Dell claimed a 26 percent increase in overall shipments to the United States in the fourth quarter, but the percentage of total net revenue for the Americas slipped 1 percentage point, to 69 percent for the three months.

Gross margin for the fourth quarter increased 70 basis points, to 18.3 percent, while Selling, General and Administrative (SG&A) costs dipped 20 basis points, to 8.7 percent.

For the 12 months, Dell revenue jumped 13.6 percent, hitting $35.4 billion, up from $31.2 billion in 2002. Net income soared 70.3 percent, reaching $2.1 billion, compared with $1.2 billion the previous year. Excluding special charges, net income for the 12 months rose 19.2 percent, to $2.1 billion, from $1.8 billion the previous year.

Gross margin for the year edged up 20 basis points, to 17.9 percent, while SG&A costs fell 30 basis points, to 8.6 percent.

In the year, desktop share of total revenue held firm at 53 percent, while notebooks share dipped 1 percentage point, to 27 percent. The Americas increased share of total revenue in the 12 months, to 71 percent.