Dell does tough: Latitude XFR D630
Dell's latest quarterly financial results beat Wall Street expectations, leading to a brief surge in the share price (the shorts got socked), but expectations were pretty low. Dell's first quarter revenues grew by 9% to $16 billion, while profits just edged ahead by 4% to $784 million. The company said:
Product shipments in the quarter increased 22%, with servers growing three times the industry rate at 21%. Storage revenue increased 15% and enhanced services revenue was up 13%. Notebook unit growth, a Dell strategic priority, rose sharply at 43% and 1.2 times the industry growth rate. Consumer units grew at more than two times the industry rate and the company increased its global share by 1.2 points to 8.8% during the quarter.
Much of the turnaround came from shedding 7,000 staff over the past year, though Dell also "added about 2,700 employees through acquisitions". It also benefited from the weak dollar.
Dell says it did well in India and China, "with revenue increases of 52% and 30%, and unit shipment growth of 68% and 43%".
Getting into retail outlets (13,000 now) helped notebook sales. Dell says:
"Notebook units grew 43% year-over-year with revenue growth of 22%. In the quarter, Dell released its first fully ruggedized laptop, the Latitude XFR D630. In Global Consumer, notebook units increased 78% and made up 60% of the product mix."
One assumes that the revenue growth is much lower than the unit growth in notebooks not just because of falling prices, but because retail sales are likely to be less profitable. (There's a dealer margin.)
Still, the company does seem to have turned the corner following Michael Dell's return to the helm on January 31, 2007.
Whether Dell will ever resume its former stunning growth path is another matter. The world has changed since then.
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