Dell net declines 18 per cent to USD 764 million in Oct-Dec

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Computer maker Dell on Wednesday said its net income declined by 18 per cent to USD 764 million in fourth quarter of 2011, impacted by shortage of hard disks and weaker demand in public segment in the US and western Europe.

The net income was at USD 927 million in the same period last year, Dell said in a statement.

Dell president Amit Midha said the shortage of hard disks impacted supply of high-capacity hard disk drives for higher-end computers. "We could not get a proper mix (of drives), which impacted the ability to offer higher-end products."

Dell's revenue saw a marginal increase of two per cent in the reported period at USD 16.03 billion from USD 15.69 billion in the fourth quarter of 2011.

The company's net income grew 33 per cent to USD 3.49 billion in FY'12 from USD 2.63 billion in 2011.

On full year basis, the company's revenues saw flat growth (one per cent) at USD 62.07 billion in the reported year from USD 61.49 billion in FY'11.

For fiscal 2013, the company expects non-GAAP earnings per share to exceed the record USD 2.13 it delivered in fiscal 2012 and expects to continue strong execution, with cash flow from operations exceeding net income.

Dell, one of the world's major computer makers, expects first quarter revenue to decline 7 per cent sequentially, saying it aligns with normal seasonality adjusted for the fourteenth week.

The company, however, witnessed strong growth in the Asia-Pacific and Japan revenue at 10 per cent, including 15 per cent growth from China, while that from Europe, Middle East and Africa (EMEA) increased 8 per cent in the quarter.

Revenues from India grew three per cent in the reported quarter, while for FY'12, the growth rate stood at 13 per cent.

Revenue in Brazil, Russia, India and China (BRIC) region increased 10 per cent in the quarter and 15 per cent for the fiscal year.

The revenue from Americas was down 3 per cent, while revenue in growth countries (those outside the US, Canada, Western Europe and Japan) increased 8 per cent in the quarter and 12 per cent for the fiscal year.

Cash flow from operations in the reported quarter was USD 1.8 billion, and Dell ended Q4 with USD 18.2 billion in cash and investments, the statement said. (MORE) PTI SP MR MR 02221216

For the fiscal year, Dell spent USD 2.7 billion to purchase 178 million shares of Dell stock, it added.

Large enterprise segment saw revenues growing 5 per cent at USD 4.9 billion in the quarter with broad-based growth across both client and enterprise solutions and services. Revenue for the full year was USD 18.5 billion, up 4 per cent from the previous year.

Public revenue was down one per cent at USD 3.9 billion, affected by continued weakness in US Federal and Western Europe, while small and medium business segment revenue grew 6 per cent to USD 4 billion.

Enterprise solutions and services revenue was up 18 per cent during the quarter to an all-time high of USD 1.2 billion.

SMB delivered USD 412 million in operating income, or 10.3 per cent of revenue, driven by the better mix of higher-margin enterprise solutions and services.

Consumer segment revenue was USD 3.2 billion, a two per cent decline for the quarter. Revenue weakness was largely concentrated in the US, while revenue from non-US countries grew 10 per cent.

Dell Services revenue grew 12 per cent to USD 2.2 billion and represented 14 per cent of its business.

Dell-owned storage grew 33 per cent to USD 463 million, led by offerings based on company-owned intellectual property, including Compellent, which had sequential growth of more than 60 per cent. Server and networking revenue grew 6 per cent.