Dell Inc. is riding a rocky road as it slips into privitization, posting an 11 percent drop in revenue of $14.3 billion from the year-ago quarter of $16 billion, and a sizable 8 percent dip over the fiscal year, with revenue dropping to $56.9 billion from $62 billion.
Net income dropped by 31 percent to $530 million, down from from $764 million form the year-ago quarter.
For the quarter, dips continued into the Enterprise and SMB market, where revenue slipped 7 and 5 percent, respectively. Public sector sales were down 9 percent, a decrease attributed to government austerity measures. Dell storage was also down 8 percent. The consumer market took the biggest hit, a drop of 20 percent for the fiscal year.
Amid the losses, Dell did have some positive figures.
Dell’s networking revenue shot up 42 percent and saw 100 percent growth in the Force10 business. Dell posted server revenue up 5 percent, and saw its 12G PowerEdge servers represent 80 percent of its revenues in the space. Quest Software delivered above a $200M revenue target.
Enterprise solutions –as a subset — saw a gain of 6 percent to $5.2 billion in revenue, and Dell Wyse orders saw an increase in demand, by 25 percent year over year, which also included enterprise virtualization solutions.
On the earnings call, Brian Gladden, senior vice president and CFO took questions to provide color on Dell’s figures, but said he would take no questions on the privatization process. Michael Dell was not on the call.
When asked about the rise in the white-box server market, and a relatively slow rise in Dell’s own server sales, Gladden said that “it’s not a new dynamic,” and that ” we’re still seeing strong growth in our business [and with] our 12G server products.”
Gladden also said Dell would continue to focus on applications in the BPOS space and that there were many legacy contracts Dell would continue to execute on, in addition to a continuing need for Windows 7 refreshes. Gladden said that 40 percent of its install base still is running Vista or XP and that Dell would continue to address that. No major mention of Windows 8 was given.
Given the nature of Dell’s transition, Gladden said there would be no outlook for 2014 or the first quarter. However, there will be a change within Dell’s reporting structure (seen above). While the structure is mostly self-explanatory, Gladden said that end user computing will encompass 3rd party software, thin clients and tablets, along with the traditional compute categories.
Gladden often repeated that Dell would be coming up against many challenges, but expressed confidence in the ability for Dell to address them. In truth, we’ll simply have to wait and see.
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