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Dell's Third Quarter Earnings Report
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DELL
Dell (Nasdaq:DELL) announced its results for the most recent quarter on November 15, 2012. Dell is a technology company that offers desktop PCs, software and peripherals, servers, and networking and storage services to customers worldwide.
Earnings season is important to investors because it shows how much profit is left in the company's hand after deducting costs from revenue. SEE: 5 Tricks Companies Use During Earnings Season
The Numbers: Dell's EPS fell in line with analyst expectations of 39 cents per share while revenue of $13.72 billion missed estimates of $14.92 billion. Revenue fell 10.7% from the same period last year. Last quarter marks the third in a row in which the company has seen falling revenue on a year-over-year basis. Dell's net income for the third quarter was $475 million. According to the reported number, this is down 46.8% from last year's figures. The company has now reported lower net income in each of the last four quarters.
Management Quote: "We are consistently executing our end-to-end solutions strategy for the benefit of our customers," said Michael Dell, Chairman and CEO. "In the quarter, we completed the acquisition of Quest Software which - along with other recent acquisitions like SonicWALL and Wyse - adds leading management, security, virtualization and cloud capabilities to our expanding portfolio of powerful solutions. In a difficult global IT spending environment we saw solid proof points that demonstrate progress in our strategy," said Brian Gladden, Dell CFO. "A highlight has been the strong progress of our newly introduced servers, with our server and networking business up 11 percent. We're also encouraged by early interest in our new Windows eight touch portfolio and the opportunities it creates for our commercial and consumer businesses."
A Look Back: Net income has dropped 21.3% year-over-year on average across the last five quarters. Performance was hurt by a 46.8% decline in the most recent quarter from the year-earlier quarter.
The company's cost of sales fell 8.8% from a year earlier to $10.85 billion. Last quarter, cost of sales was 79.1% of revenue versus 77.4% a year earlier.
Looking Ahead: Analysts appear increasingly negative about the company's results for the next quarter. The average estimate for the fourth quarter has moved down from 54 cents a share to 40 cents over the last 90 days. A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price. At $1.73 per share, the average estimate for the fiscal year has fallen from $1.90 90 days ago.
Earnings season is important to investors because it shows how much profit is left in the company's hand after deducting costs from revenue. SEE: 5 Tricks Companies Use During Earnings Season
The Numbers: Dell's EPS fell in line with analyst expectations of 39 cents per share while revenue of $13.72 billion missed estimates of $14.92 billion. Revenue fell 10.7% from the same period last year. Last quarter marks the third in a row in which the company has seen falling revenue on a year-over-year basis. Dell's net income for the third quarter was $475 million. According to the reported number, this is down 46.8% from last year's figures. The company has now reported lower net income in each of the last four quarters.
Management Quote: "We are consistently executing our end-to-end solutions strategy for the benefit of our customers," said Michael Dell, Chairman and CEO. "In the quarter, we completed the acquisition of Quest Software which - along with other recent acquisitions like SonicWALL and Wyse - adds leading management, security, virtualization and cloud capabilities to our expanding portfolio of powerful solutions. In a difficult global IT spending environment we saw solid proof points that demonstrate progress in our strategy," said Brian Gladden, Dell CFO. "A highlight has been the strong progress of our newly introduced servers, with our server and networking business up 11 percent. We're also encouraged by early interest in our new Windows eight touch portfolio and the opportunities it creates for our commercial and consumer businesses."
A Look Back: Net income has dropped 21.3% year-over-year on average across the last five quarters. Performance was hurt by a 46.8% decline in the most recent quarter from the year-earlier quarter.
The company's cost of sales fell 8.8% from a year earlier to $10.85 billion. Last quarter, cost of sales was 79.1% of revenue versus 77.4% a year earlier.
Looking Ahead: Analysts appear increasingly negative about the company's results for the next quarter. The average estimate for the fourth quarter has moved down from 54 cents a share to 40 cents over the last 90 days. A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price. At $1.73 per share, the average estimate for the fiscal year has fallen from $1.90 90 days ago.
by
Investopedia Staff
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