Servers, storage, and services drive Dell's growth

Dell Computer posted strong fourth-quarter and full-year earnings yesterday on the back of increased shipments worldwide.

Dell Computer posted strong fourth-quarter and full-year earnings yesterday on the back of increased shipments worldwide.

Fourth-quarter net income was $603m (£372m) for the period ending 31 January, compared with $456m for the same period the previous year. Revenue was $9.74bn, compared with $8.06bn the previous year.

Dell set company records for both net income and revenue, despite the poor economy. Kevin Rollins, Dell's president and chief operating officer, said the company will continue to do well.

"We don't expect a near-term improvement in economic conditions. But soft demand is not an excuse for poor results."

For the full 2003 financial year, Dell posted net income of $2.12bn on revenue of $35.4bn. In 2002, it posted $1.78bn on revenue of $31.2bn, excluding a special charge tied to job reductions.

Shipments of PowerEdge servers increased 28% for the quarter, shipments of Inspiron and Latitude notebooks rose 33%, and shipments of Dimension and OptiPlex desktops grew 24%. Revenue from external storage systems was up 87%, with the strongest growth in storage coming from products developed jointly by Dell and EMC.

Servers, storage, and services are driving Dell's growth, said chairman and chief executive officer Michael Dell.

"We're seeing a lot of customers move from Unix to Linux and Windows, and we're a major beneficiary there," he said. Financial, manufacturing and retail are some of the vertical markets that are switching from Unix to Dell's Linux or Windows systems running processors from Intel, and the company's partnership with Oracle is bringing Dell servers into datacentres, he added.

Dell downplayed concerns that uncertainty over war in the Middle East would slow growth, saying that customers had showed no sign of slowing their spending. He cited the company's 25% growth in fourth-quarter unit shipments, compared with 1% growth industry wide, as proof.

Dell expected revenue of $9.5bn in the first quarter of its 2004 financial year.

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