Dell reports record EPS on strength of enterprise solutions and services

The company’s revenue in the quarter increased one per cent to $15 billion, with enterprise solutions and services accounting for 30 per cent of the total, and its operating income was $1.2 billion, or 8.1 per cent of revenue. Dell ended the quarter with $15.2 billion in cash and investments.

In the company’s fiscal first quarter revenue improved and profit increased substantially on the strength of its commercial enterprise business.

In the two past years, Dell has made strategic acquisitions to address customers’ needs for next-generation computing solutions, intelligent data management, services, security and cloud offerings.

Additionally, the company has announced plans to invest $1 billion this fiscal year to deliver new solutions, build cloud capabilities and add significant numbers of new engineering, development and solutions-based sales resources in the US and globally to support its enterprise solutions and services focus.

Key investments include the launch of vStart for faster provisioning of virtual machines, the build out of data centers to provide customers access to public and private cloud technologies, and new solution centers where customers can test their applications.

The strong first quarter results also reflect Dell’s improved profitability in end-user-computing, particularly Dell’s client desktop and laptop offerings. This improved performance is the result of a higher-value product portfolio, good cost management, better sales execution and a significantly improved supply chain.

Michael Dell, CEO of Dell said: “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.” 

Dell expects mid-single digit revenue growth in its second quarter, which is slightly above its normal, sequential seasonal growth of 2-3 per cent. Dell’s updated outlook for fiscal 2012 includes revenue growth of 5-9 per cent and an increase in non-GAAP operating income growth to 12-18 per cent.