Operating Segments Summary:
- Enterprise Solutions Group revenue was $3.3 billion, an 8 percent increase. Operating income for the quarter was $137 million, a 9 percent decrease. Dell server, networking and peripherals revenue increased 10 percent, the fifth consecutive quarter of growth for this business, driven by continued strength in hyper-scale data center servers. Dell networking continued to grow, with a 19 percent revenue increase. Dell storage revenue declined 7 percent.
- Dell Services revenue was $2.1 billion, up 2 percent, driven by a 3 percent increase in support and deployment revenue and a 5 percent increase for infrastructure, cloud and security services revenue. Applications and business process services revenue declined 6 percent. Total Services operating income was $339 million, a 1 percent increase.
- Dell Software revenue was $310 million, and recorded an operating loss. The company is continuing to enhance its software capabilities with investments in this business that increase R&D and sales capacity.
- End User Computing revenue was $9.1 billion in the quarter, a 5 percent decrease. Operating income for the quarter was $205 million, a 71 percent decrease. Dell desktop and thin client revenue increased 1 percent, mobility revenue declined 10 percent, and revenue from software from third parties and peripherals declined 5 percent. Dell was the only vendor among the top five worldwide to increase PC unit-shipment share both year over year and sequentially in the past two calendar quarters, according to IDC.
Company Outlook:
Given the company’s announcement on Feb. 5 of a definitive merger agreement to take Dell private, the company is not providing an outlook.
About Dell
Dell Inc. (NASDAQ: DELL) listens to customers and delivers innovative technology and services that give them the power to do more. For more information, visit www.dell.com. To communicate directly with Dell, go to www.dell.com/dellshares. Follow Dell on its Investor Relations Twitter account at: http://twitter.com/dellshares or hashtag #DellEarnings.
Non-GAAP Financial Measures:
This press release includes information about non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per share (collectively with non-GAAP gross margin and non-GAAP operating expenses, the “non-GAAP financial measures”), which are not measurements of financial performance prepared in accordance with U.S. generally accepted accounting principles. In the following tables, Dell has provided a reconciliation of each historical non-GAAP financial measure to the most directly comparable GAAP financial measure under the heading “Reconciliation of Non-GAAP Financial Measures.” Dell encourages investors to review the reconciliation in conjunction with Dell’s presentation of these non-GAAP financial measures.
Special Note on Forward-Looking Statements:
Statements in this press release that relate to future results and
events are forward-looking statements and are based on Dell's current
expectations. In some cases, you can identify these statements by such
forward-looking words as “anticipate,” “believe,” “could,” “estimate,”
“expect,” “intend,” “confidence,” “may,” “plan,” “potential,” “should,”
“will” and “would,” or similar expressions. Actual results and events in
future periods may differ materially from those expressed or implied by
these forward-looking statements because of a number of risks,
uncertainties and other factors, including: effects of Dell’s proposed
merger; intense competition; Dell’s reliance on third-party suppliers
for product components, including reliance on several single-sourced or
limited-sourced suppliers; Dell’s ability to achieve favorable pricing
from its vendors; weak global economic conditions and instability in
financial markets; Dell’s ability to manage effectively the change
involved in implementing strategic initiatives; successful
implementation of Dell’s acquisition strategy; Dell’s cost-efficiency
measures; Dell’s ability to effectively manage periodic product and
services transitions; Dell’s ability to deliver consistent quality
products and services; Dell’s ability to generate substantial non-U.S.
net revenue; Dell’s product, customer, and geographic sales mix, and
seasonal sales trends; the performance of Dell’s sales channel partners;
access to the capital markets by Dell or its customers; weak economic
conditions and additional regulation affecting Dell’s financial services
activities; counterparty default; customer terminations of or pricing
changes in services contracts, or Dell’s failure to perform as it
anticipates at the time it enters into services contracts; loss of
government contracts; Dell’s ability to obtain licenses to intellectual
property developed by others on commercially reasonable and competitive
terms; infrastructure disruptions; cyber-attacks or other data security
breaches; Dell’s ability to hedge effectively its exposure to
fluctuations in foreign currency exchange rates and interest rates;
expiration of tax holidays or favorable tax rate structures, or
unfavorable outcomes in tax audits and other compliance matters;
impairment of portfolio investments; unfavorable results of legal
proceedings; Dell’s ability to attract, retain, and motivate key
personnel; Dell’s ability to maintain strong internal controls; changing
environmental and safety laws; the effect of armed hostilities,
terrorism, natural disasters, and public health issues; and other risks
and uncertainties discussed in Dell’s filings with the Securities and
Exchange Commission, including its Annual Report on Form 10-K for its
fiscal year ended February 1, 2013, as amended on June 3, 2013. Factors
or risks that could cause Dell’s actual results to differ materially
from the results it anticipates also include: (1) the occurrence of any
event, change or other circumstances that could give rise to the
termination of the merger agreement; (2) the inability to complete the
proposed merger due to the failure to obtain stockholder approval for
the proposed merger or the failure to satisfy other conditions to
completion of the proposed merger, including that a governmental entity
may prohibit, delay or refuse to grant approval for the consummation of
the transaction; (3) the failure to obtain the necessary financing
arrangements set forth in the debt and equity commitment letters
delivered pursuant to the merger agreement; (4) risks related to
disruption of management’s attention from the Company’s ongoing business
operations due to the transaction; and (5) the effect of the
announcement of the proposed merger on the Company’s relationships with
its customers, operating results and business generally. Dell
assumes no obligation to update its forward-looking statements.
