Dell profits show sharp rise
Even if economies around the world are experiencing hard times, Dell doesn’t seem to have heard about it. The computer giant reported strong figures for the first quarter on Tuesday, exceeding analysts’ expectations. Dell shares jumped in response to the news.
A statement issued by the company reported net income at $945 million or 49 cents a share – that’s a big leap, up from $341 million or 17 cents a share a year earlier. Sales were recorded at just over $15 billion, up almost 1 percent on the same time last year. There may have been an inkling that these figures were going to be good, coming soon after it was announced that the company had retaken the number two position in global PC sales. HP holds the top spot.
Michael Dell, the company’s CEO and chairman, was understandably delighted with the financial report, saying, “We’re off to a solid start in our fiscal year 2012. Our substantial profit increase demonstrates that our strategy is working and our execution is improving.”
According to Dell’s statement, the strong results reflect the company’s “improved profitability in end-user-computing, particularly Dell’s client desktop and laptop offerings.” It continues: “This improved performance is the result of a higher-value product portfolio, good cost management, better sales execution and a significantly improved supply chain.”
In an interview with Dow Jones reported in the Wall Street Journal, the company’s chief financial officer Brian Gladden said: “When you look at margins, it’s continuing a trend of moving to higher margin products. We’ve seen improved margins in nearly the entire portfolio.”
According to the WSJ, Dell also said that consumer demand for PCs was slow as customers looked more closely at tablets instead. Dell itself has the Inspiron duo and two Streak tablets on the market, though sales have hardly threatened to knock the popular iPad off its perch. The Texas-based company also hopes to release another tablet at some point this year, possibly in September.
Dell’s healthy sales to businesses of products such as servers, storage devices and computers were a big factor in its strong first-quarter results. No doubt the company will be wanting to build on its success in that field over the coming months, and if the economies around the world begin to pick up, it’ll be well placed to do so.
