Dell's confident corporate spend leads to record third quarter earnings

Dell has posted record fiscal third quarter earnings with growth in all sectors. Overall, its revenue grew 21 percent year on year to $45.8 billion. Operating income was $1.17 billion or 45 cents per share.

Operations increased across all of its commercial business segments bolstering profitability. Commercial business revenue was $12.4 billion, up 24 percent. Its enterprise and services revenue grew 25 percent to reach $1.7 billion while client revenue increased 38 percent. Large enterprise revenue was $4.3 billion, a 27 percent increase from the same period last year. Operating income ringed in $400 million – 9.2 percent of revenue. 

Dell’s public sector revenue – including its Perot Systems integration – was $4.4 billion, or a 20 percent increase. Operating income was 10.2 percent of revenue at $451 million. Its state and local government business represented about nine percent of total public business, or under three percent of Dell’s revenue, and was up five percent in the quarter.

Small and medium businesses saw its revenues take a shot in the arm with a record high operating income of $391 million – 10.7 percent of revenue and up 39 percent year-on-year. Overall revenue was $3.7 billion, up 24 percent. Dell reckons its PowerEdge, PowerVault and PowerConnect products drove profits.

The consumer segment just about broke even. Overall revenue was $3 billion, or a four percent increase. 

Late trading yesterday saw stocks rise 9.7 percent to $15, and swell to $13.67 on the NASDAQ.

All regions Dell operates in saw growth. Asia-Pacific and Japan revenue grew 29 percent, while EMEA and the Americas grew 15 and 18 percent respectively. It did well in India with a 55 percent increase. Dell says the emerging markets of Brazil, Russia, India and China grew 30 percent overall and now make up 13 percent of total company revenue.

Bloomberg believes falling component prices gave Dell a helping hand, along with more confident spending from the corporate sector which needs to upgrade both computers and servers. Analyst Aaron Rakers told Business Week that Dell has got its act together with pricing discipline.

Michael Dell and Co. forecast that full year revenue will be somewhere between 14 to 19 percent and non-GAAP operating income growth will be between 28 and 32 percent. 

Yesterday Dell decided to butcher its mobile business unit and push the segments elsewhere, while its leader jumped ship.