Round Rock, Texas — Growing notebook sales in its fiscal third quarter helped push overall revenue up 18 percent at IT giant Dell for the three months, hitting $12.5 billion, compared with a year-ago $10.6 billion. Growth in the United States was stimulated by a 20 percent increase in spending by business customers.
Dell’s quarterly net income for the period ended Oct. 29 rose 25 percent, reaching $846 million, up from $677 million year-on-year. Gross margin increased to 18.5 percent in the quarter, up from 18.2 percent last year, while expenses increased to 8.8 percent during the three months, up from 8.5 percent year-on-year.
Dell’s notebook unit shipment increase of 35 percent in the third quarter was part of the company’s claim to an industry record for overall unit shipments in the United States, rising above 5 million systems in the three months, with an accompanying increase of nearly two points in market share, to 33 percent, said Dell.
In the third quarter, notebooks accounted for 30 percent of Dell’s net revenue, up from 28 percent in the same quarter in 2003. The desktop share of total net revenue in the three months dropped 1 percentage point, to 49 percent, while enterprise percentage also slid 1 percentage point, to 21 percent.
Citing percentage of total net revenue gains in both the Europe and Asia Pacific/Japan markets in the third quarter, Dell said it lost ground in the Americas during the period, dropping to a 68 percent share, from a year-over-year 71 percent, even with a 20 percent increase in spending by business customers in the United States.
Dell, which has recently gained a toe hold in the consumer electronics business, with sales of such products as plasma TVs and digital music players, claims these sales account for 15 percent of the company’s overall revenue. At the same time, Dell said it is focusing on its enterprise product category, while continuing to emphasize its business sales over CE products for the home.
Behind its gains in notebooks, Dell reported an 18 percent rise in desktop unit volume in the third quarter and a 37 percent increase globally in unit movement of CE products such as flat-panel TVs and music players.
For the nine months, Dell revenue climbed 19 percent, hitting $35.7 billion, compared with $30 billion in the same period in 2003. Net income, as in the third quarter, also rose 25 percent, reaching $2.4 billion, up from $1.9 billion in the same time frame a year earlier.
Gross margin in the nine months remained flat, at 18.2 percent, while expenses increased to 8.7 percent, from 8.5 percent, compared with the first nine months of last year.
Percentage share of net revenue in the Americas continued to decrease in the nine months, sliding to 67 percent from a year-ago 70 percent.
The notebook category increased its percentage of total net revenue in the nine months to 29 percent, up from 27 percent in the same period in 2003. The desktop percentage of total net revenue slipped to 50 percent in the nine months from a year-earlier 51 percent.