Enterprise, SMB Earnings Propel Dell In Q1

The company's growth in its enterprise solutions and services business was offset by a weakening of its public sector and consumer businesses, sending a mixed message about the company's overall prospects.

Dell reported revenue for its first fiscal quarter, which ended April 29, of $15.0 billion, up only 1 percent over the $14.9 billion reported for the first quarter of 2011.

The company also reported total income for the quarter of $945 million, up a substantial 177 percent over the $341 million it reported last year. Dell also reported first quarter 2012 earnings per share of 49 cents, up 188 percent from the 17 cents per share it reported last year.

Dell attributed the strong earnings for the quarter to several strategic acquisitions, including investments in companies providing next-generation computing solutions, intelligent data management, services, security, and cloud technologies. The company also improved the profitability of its desktop and laptop offerings, it said.

Revenue for Dell's commercial business rose 12 percent, while commercial services revenue rose 6 percent over the year. Enterprise solution and services rose a combined 5 percent over last year.

Dell also said its server and networking revenue increased 11 percent. However, total storage revenue dropped 13 percent, with the drop in it EMC-branded storage business hugely offsetting the 11-percent increase in its storage sales based on its own technology, including its Compellent and EqualLogic acquisitions.

Dell Services revenue grew 5 percent, the company said.

Dell also reported a 5 percent year-over-year increase in enterprise solutions and services revenue, a 2 percent drop in public revenue, a 7 percent rise in SMB revenue, and a 7 percent drop in consumer business revenue.

Dell said it expects mid-single digit revenue growth in its second quarter, with its public sector business expected to benefit from increased state and local governments and education customers. The company also expects the release of new systems based on Intel's Sandy Bridge technology to help its SMB and consumer businesses.

Overall, Dell said it is expecting a 5-percent to 9-percent growth in revenue and a 12-percent to 18-percent growth in non-GAAP operating income for all of fiscal 2012.

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