Dell Q1 revenue, net income up sharply once again

Dell's first-quarter revenue and net income soared on strong sales of high-margin products such as servers and notebooks, the company said Thursday.

Revenue for the first quarter in Dell's 2005 fiscal year, or the period ended April 30, was US$11.5 billion, up 21 percent from the first quarter of last year and slightly more than the US$11.4 billion expected by industry analysts polled by Thomson First Call. Net income was US$731 million, up 22 percent from the US$598 million Dell earned in the first quarter of fiscal 2004.

Earnings per share were US$0.28, equaling analyst estimates from Thomson First Call. Dell raised its revenue guidance in April on strong sales outside the U.S. but reiterated its earnings per share guidance.

The first-quarter results kept intact a streak of solid quarters from the Round Rock, Texas, company, said Jim Schneider, Dell's chief financial officer, on a conference call following the company's announcement. "We've increased shipments and net income by more than 20 percent for seven straight quarters," he said.

Server shipments increased 24 percent, and notebook shipments rose 39 percent, Dell said. The growth in the company's shipments exceeded that of other industry vendors in both categories, Dell said.

The company increased shipments to Europe, the Middle East, and Africa by 33 percent year over year, Schneider said. Dell also now leads the industry in Intel architecture-based server shipments to both Japan and China, the two largest markets in Asia-Pacific, he said.

Dell's U.S. corporate business had the best quarter it has seen in three and a half years, Schneider said. The company has seen stronger growth outside the U.S., mainly because the majority of its business is done within North and South America, but U.S. corporate demand appears as healthy as ever, he said.

"We're not seeing huge replacements, but you're seeing people are more active, and (there are) more bids and interest in upgrades," Schneider said.

Component costs increased a little bit more than the company had expected in the first quarter, Schneider said. Memory prices have risen steadily over the last few months, although Dell expects the prices to stabilize in the second quarter, he said.

Inventories, an important measure for a company that prides itself on its lean manufacturing and distribution organization, also grew slightly. Schneider acknowledged the US$425 million in inventories was a little higher than he would like, but the company isn't worried because it is coming off historic lows in inventory expenses, he said. Dell now has four days of inventory on hand, whereas last quarter it had only three days of inventory in stock, an all-time low, he said.

Looking ahead to the second quarter, Dell expects to record US$11.7 billion in revenue and post earnings per share of US$0.29, Schneider said. Both figures represent 20 percent increases as compared to last year's second quarter.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Tom Krazit

IDG News Service
Show Comments

Cool Tech

Breitling Superocean Heritage Chronographe 44

Learn more >

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?