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Dell Sets Records In Q4

2/11/2005 09:10:00 AM Eastern

Round Rock, Texas — Dell set records in the computer maker’s fiscal fourth quarter, as strong growth throughout the company created quarterly record highs for revenue, operating income and unit shipments.

Dell reported a 16.9 percent jump in three-month revenue, climbing to $13.5 billion, from $11.5 billion in the year-ago period.

Operating income moved up 21 percent to $1.2 billion from $981 million, and pro-forma net income increased to $947 million from $749 million, a 26 percent increase.

However the pro-forma net excludes a tax charge of $280 million. With the charge included, Dell net income fell 11 percent to $667 million from $749 million.

Gross margin in the quarter, ended Jan. 28, was 18.5 percent, compared with 18.2 percent in the same three months in 2003.

Fourth-quarter results brought “solid volume growth across product lines in the Americas,” said Dell, highlighted by 25 percent growth in servers and a 28 percent increase in notebook computers.

However, the Americas percentage of total net revenue in the fourth quarter edged downward to 66 percent from a year-ago 67 percent, while international sales and sales to business were stronger. Sales to U.S. consumers increased only 10 percent, while, at the same time, competitive pricing increased pressure on profit.

Dell’s global notebook percentage of total net revenue moved up to 28 percent in the fourth quarter, from a year-earlier 27 percent. Desktop share slipped to 51 percent in the same time, from 52 percent in the fourth quarter of 2003, while the company’s enterprise business held fast at a 21 percent share.

For the 12 months, Dell revenue jumped 18.7 percent to $49.2 billion, from $41.4 billion in 2003.

Operating income increased 20 percent for the 12 months, reaching $4.3 billion from $3.5 billion the previous year.

Pro-forma net income moved up 20 percent to $3.3 billion from $2.6 billion, but excludes the $280 million charge. With the charge, net income increased 15 percent to $3 billion from $2.6 billion.

Gross margin inched upward to 18.3 percent, from 18.2 percent.

For the 12 months, Dell’s notebook business, as a percentage of global net sales, climbed to 29 percent, from 27 percent, while its desktop business share of total net revenue slipped to 50 percent, from a year-on-year 51 percent. Enterprise share dropped to 21 percent, from 22 percent.

The Americas for the year accounted for a 67 percent share of total net revenue, down from 69 percent in 2003.

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