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Dell Q3, Net Climbs 20.6%

Round Rock, Texas – Dell posted a 16 percent increase in revenue for its fiscal third quarter, hitting $10.6 billion, up from $9.1 billion in the year-ago period.

Net income for the three months jumped 20.6 percent, to $677 million, from $561 million year on year, as the company kept its costs under control and recorded strong sales in servers and data storage products. Gross margin remained steady, at 18.2 percent.

Dell, which has been expanding its offerings into consumer electronics, including flat panel televisions and digital music players, as well as printers, still finds the majority of its revenue comes from computers sales.

During the third quarter, ended Oct. 31, Dell said shipments of notebooks increased 31 percent and desktops 20 percent. Notebooks accounted for 28 percent of net computer revenue, the same as the third quarter of 2002, while desktops accounted for 50 percent, down from a 52 percent share of computer revenue year over year.

Dell, which introduced its printers last March, said the business was profitable and that it had sold over 1 million units in the seven months. Shipments of printers increased nearly 70 percent from the second quarter.

The Americas remained Dell’s largest market, accounting for a 71 percent share of net revenue in the third quarter, down one percentage point from the 72 percent share racked up in the third quarter of last year. Shipments to the Americas rose 20 percent in the quarter, with systems sold to U.S. consumers up by 28 percent.

For the nine months, Dell consolidated revenue climbed 16.6 percent, reaching $29.9 billion, up from $25.7 billion in the same period a year ago. Net income for the nine months soared 24.8 percent, to $1.9 billion, up from $1.5 billion year on year. Gross margin increased to 18.2 percent for the nine months, up from 17.8 percent the previous year.

The company expects fourth quarter shipments to increase more than 25 percent year over year, with revenue climbing 18 percent in the three months, to $11.5 billion.