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Dell meets quarterly earnings expectations

Dell has posted a 16% gain in third-quarter revenue, cracking the $10bn barrier on strong server and storage device shipments.

Revenue was $10.6bn, up from last year's third quarter revenue of $9.1bn. Third-quarter net income was $677m, up 21% from last year's third-quarter net income of $561m.

Overall, worldwide shipments increased 22% in the period, which ended 31 October. Shipments of servers increased 30% and shipments of external storage systems increased 68% in the third quarter.

"We still have lots of room to grow in servers, storage, peripherals, and services," said chairman and chief executive officer Michael Dell.

He added that he believed the technology world as a whole has stabilised, citing five consecutive quarters of industry growth and unseasonably high third-quarter growth.

While the largest part of Dell's growth comes from enterprise hardware, the PC business continues to account for most of the company's revenue. Desktops represented half of Dell's revenue in the third quarter, while notebooks made up 28% of that revenue.

Notebook shipments of the Inspiron and Latitude models were up 31% worldwide, and desktop PCs such as the Dimension and Optiplex increased 20%.

PC sales have regained their late 1990s strength over the past few quarters, and the company saw double-digit percentage increases within every customer segment and geography. Revenue from all those segments was equally strong, except among enterprise customers, where revenue growth is evident but sluggish.

Dell entered the consumer electronics market this quarter with the launch of liquid crystal display televisions and a personal music player, but the launch occurred too late in the quarter to have an effect.

The majority of Dell's third-quarter revenue, 71%, came from the Americas. Revenue from Europe made up 19% of the total revenue, while Asia-Pacific, including Japan, accounted for 10%.

The company expected fourth-quarter shipments to grow 25%, with revenue of $11.5bn.

Tom Krazit writes for IDG News Service


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