The ‘make-to-order’ PC king makes a grand comeback with its emphatic performance for FY’11.
When four year ago, on January 31, 2007, when Dell Inc (NASDAQ: DELL), once the undisputed king of the desktop computer market which shot to fame with its unique make-to-order or direct-to-customer model, announced the unceremonious ouster of its then CEO Kevin Rollins and return of Michael Dell, the Founder-Chairman, as the new CEO, expectations rose high. Dell was making a comeback as CEO at a time when Dell was down, though not out, dethroned by arch rival HP as the world’s number one PC maker, and as rivals such as Acer and Lenovo were busy chipping away at its market share.
However, four years down the line, once mighty Dell seems well on track to regain its crowning glory, going by its outstanding performance during the fourth quarter of the fiscal year 2011, led by its expanding strength as an enterprise solutions provider and continued strong execution. In fact, according to the company, it was also one of its most successful financial quarters ever.
The company’s net income during the fourth quarter of FY’11 grew by 177% to $927 million from $334 million in the same quarter a year ago while its full-year net income was up 84% to $2,635 million ($2.6bn) in FY11 from $1,433 million ($1.4bn) in the previous financial year. The company’s full-year EPS too grew almost at a similar rate (85% to be precise) to $1.35 from $0.73, during the said period.
Commenting on the company’s spectacular performance, Michael Dell, Chairman and CEO said, “I’m very pleased with our fiscal year results and the strong performance we’re seeing in our commercial businesses.” He added, “We remain focused on developing and acquiring new technologies and capabilities, and our IT solutions portfolio has never been stronger. Customers are now seeing Dell in a fresh light, and we’re heading into the new year with strength and optimism.”
Market analysts attributed the company’s robust performance to the falling price of components and the replacement of corporate IT products and also to Dell’s strategy of focusing on emerging areas such as data storage services and cloud computing away from the slowing market for PCs and towards, the influential BBC commented. “Dell's positive outlook is a plus for its suppliers' businesses, but their share price will still be weighed on by rising costs and thinning margins," it cited Andrew Deng of Taiwan International Securities as saying.
Giving its outlook for the fiscal-year 2012, the company said that it expects revenue growth of 5-9%, non-GAAP operating income growth of 6-12%, and continued strong execution on cash flow with cash flow from operations exceeding net income.
Although, it cautioned that it expects normal seasonal declines in its consumer and public businesses and, as such, a slight sequential decline in revenue in its first quarter of fiscal-year 2012.
Fiscal-Year 2011 Fourth Quarter and Full Year Highlights
Fourth Quarter Fiscal Year
Fourth Quarter Fiscal Year
(in millions) | FY11 | FY10 | Change | FY11 | FY10 | Change |
Revenue | $15,692 | $14,900 | 5% | $61,494 | $52,902 | 16% |
Operating Income (GAAP) | $1,145 | $510 | 124% | $3,433 | $2,172 | 58% |
Net Income (GAAP) | $927 | $334 | 177% | $2,635 | $1,433 | 84% |
EPS (GAAP) | $0.48 | $0.17 | 182% | $1.35 | $0.73 | 85% |
Operating Income (non-GAAP) | $1,286 | $798 | 61% | $4,149 | $2,974 | 40% |
Net Income (non-GAAP) | $1,018 | $544 | 87% | $3,106 | $2,054 | 51% |
EPS (non-GAAP) | $0.53 | $0.28 | 89% | $1.59 | $1.05 | 51% |
Source: Dell.com
Amy, Chief Editor.
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