Dell revenue up despite drop in U.S. consumer business
It posted $766M in net income in Q3
November 29, 2007 (IDG News Service) -- Dell Inc. experienced a drop in its U.S. consumer business, but managed to record revenue growth for the third quarter, boosted by an increase in global laptop sales.
The company reported net income of $766 million or 34 cents per share, for the third quarter of 2008, compared to net income of $601 million for the year-earlier quarter. Earnings fell short of estimates made by Thomson Financial analysts, who projected net income of $785.71 million and earnings per share of 38 cents. The earnings are based on a non-GAAP (generally accepted accounting principles) basis.
Dell recorded third-quarter revenue of $15.65 billion for the quarter ending Nov. 2, a 9% year-over-year increase.
Revenue for Dell's U.S. consumer business declined 6%, while revenue from mobility products, including laptops, increased 19% globally, Dell said in a statement. Revenue from laptops continues to increase as desktop revenues decline, Dell said.
The company recently completed an internal accounting investigation and restated its financial results from fiscal 2003 to the first quarter of 2007, bringing it into compliance with listing requirements specified by the Nasdaq stock exchange.
Dell is in the process of restructuring after an accounting scandal, personnel changes and slow growth in the U.S. PC market. It is also battling Hewlett-Packard Co., which is closing in on Dell's position as the leading U.S. PC vendor, according to surveys.
Michael Dell admitted the company had lost its customer focus when he returned as CEO in an effort to revive the company after Kevin Rollins resigned. The company has since launched new distribution channels for consumer PCs and released new hardware, services and tools to ease management and reduce costs of maintaining IT systems for corporations.
It released a new line of PowerEdge servers to expand its presence in data centers and recently signed a deal with Sun Microsystems Inc. to distribute the Solaris OS on its PCs. It also signed a deal with Google Inc. to sell its search appliances.This month, Dell also agreed to acquire storage-area network vendor EqualLogic Inc. for $1.4 billion, and desktop services management company Everdream for an undisclosed amount.