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Dell Q4 Revenue And Net Jumps

2/13/2004 09:35:00 AM Eastern

Round Rock, Texas — Buoyed by a swing to increasing sales of the more profitable enterprise categories of server computers and software and peripheral products, in addition to notebook computers, Dell posted an increase in both overall revenue and earnings during its fiscal fourth quarter.

Calling the past three months, its 'best operating period ever,' Dell increased fourth quarter revenue by 18.2 percent, hitting $11.5 billion, up from $9.7 billion in the year-ago period.

Operating income jumped 19.7 percent in the fourth quarter, ended Jan. 30, reaching $981 million, compared with $819 million in the same three months the previous year.

Net income soared 24.2 percent, to $749 million, up from $603 million in the fiscal fourth quarter a year ago. Gross margin held about firm in the year’s final quarter, edging downward to 18.2 percent, from 18.3 percent in the fourth quarter of 2002.

'Business is growing,' CEO Michael Dell said in a conference call. 'The signs are getting relatively healthy. We’re seeing a lot of increased demand from customers to refresh their older base of products.'

Dell continued to increase its enterprise product share of total revenue, with this number rising to 21 percent in the fourth quarter, compared with 19 percent year-on-year. The desktop category share of revenue decreased to 52 percent in the fourth quarter, down from 55 percent the previous year, while notebooks moved from a 26 percent share, to 27 percent in the same time frame.

'Much of the industry’s quarterly growth was the low end of the desktop and notebook categories, which offer little if any profitability,' said Kevin Rollins, president and chief operating officer. 'Dell met its operating targets by pursuing profitable growth.'

Shipments of servers increased 40 percent in the fourth quarter year-on-year, notebooks 40 percent and desktops 21 percent, said Dell. Storage revenue moved up 47 percent in the same three months, while revenue from software and peripherals increased 36 percent.

Dell product shipments in the Americas rose 22 percent in the fourth quarter, due to 'solid increases' in all customer segments. However, the Americas accounted for 67 percent of Dell net revenue in the final three months, down from 69 percent in the year-earlier fourth quarter. Both Europe and Asia/Japan increased share of overall revenue, each by one percentage point.

For the 12 months, Dell revenue jumped 17.1 percent, hitting $41.1 billion, up from $35.4 billion in the previous year. Operating income climbed 24.6 percent, to $3.5 billion, from $2.8 billion and net income increased 24.6 percent, to $2.6 billion, from $2.1 billion. Gross margin for the latest 12 months rose to 18.2 percent, from a year-over-year 17.9 percent.

In the 12 months, enterprise share of total revenue increased two percentage points, to 22 percent, while desktop share dropped two points, to 51 percent. Notebooks held firm at a 27 percent share.

Revenue percentage accounted for by the Americas in the fiscal year dropped two percentage points, to 69 percent.

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