Commercial Enterprise Business Helps Dell in 1st Quarter

By Ed Silverstein May 18, 2011

Dell had noteworthy operating profit in some segments – during the recent first quarter – fueled by the strength of the commercial enterprise business, the company said.

Dell also saw good news about its client desktop and laptop offerings. That is caused by a “higher-value product portfolio, good cost management, better sales execution and a significantly improved supply chain,” Dell said in a company press release.

“We’re off to a solid start in our fiscal year 2012,” commented Michael Dell, chairman and CEO, in a company statement. “Our substantial profit increase demonstrates that our strategy is working and our execution is improving.”

Dell saw first quarter revenue of $15 billion and operating income of $1.2 billion.

Enterprise solutions and services revenue increased 5 percent to $4.4 billion, the company adds.

“We continue to build momentum with our strategy to expand our enterprise solutions and services business, and it’s contributing to our strong financial results. We have built an $18 billion enterprise solutions and services business with exciting growth potential and our execution in the core client business continues to be very good,” says Brian Gladden, Dell’s chief financial officer. “We are positioned to continue delivering value to our customers and investors.”

In its future outlook, Dell predicts “mid-single digit revenue growth” during the second quarter.

That is “slightly above its normal, sequential seasonal growth of 2-3 percent,” the company said.

There is also expected to be increased purchasing by state and local government, as well as by education customers – as they finish their fiscal years.

In addition, Dell predicts that Small and Medium Business and Consumer businesses will see “above average seasonality due to the timing of demand for Dell’s Sandy Bridge based offerings, a solid consumer back-to-school spending season and a refreshed portfolio of XPS products,” the company said.

Dell’s outlook for fiscal 2012 projects revenue growth at between 5 and 9 percent and a jump in non-GAAP operating income of between 12 and 18 percent, the company said.

Dell’s quarterly earnings were ahead of expectations, according to Business Insider.

However, Dell had some “weakness” in the consumer market during the quarter. Consumer revenue was $3 billion, a 7 percent decrease from 2010, Business Insider said. But it could be worse. In comparison, HP decreased 23 percent.

In other company news, TechZone360 reports that SAP and Dell are collaborating to expand expansion cloud and in-memory computing offerings.

SAP apps will be available through Dell's VIS Next Generation Datacenter Platform, which will provide new ways for customers to increase IT responsiveness and business efficiency, TechZone360 said.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.

Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

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