Dell Quarterly Earnings Results, Profits: A Reality Check
When Dell announced Q3 2012 fiscal results today, The VAR Guy took a closer look to get a feel for how Dell’s server, storage, networking and cloud services businesses were evolving. Sure, The VAR Guy still cares about traditional PCs and server sales. But ultimately, acquired offerings like Boomi, Compellent, EqualLogic and Force10 Networks promise far more growth for Dell PartnerDirect channel partners. Here’s the update.
First, the reaction from Wall Street: Dell’s Q3 2012 revenues were $15.365 billion, essentially flat compared to Q3 FY11. Net income for Q3 2012 rose a healthy 9 percent to $893 million. The bad news: Dell has missed quarterly revenue expectations for five straight quarters, an analyst told The Wall Street Journal. Dell shares are down about 1.2 percent in after-hours trading, according to TheStreet.com.
The VAR Guy’s spin:
- Dell remains a company in transition, not it crisis mode.
- Dell’s channel strategy continues to accelerate, though Dell’s mix of channel products continues to evolve.
A few examples:
- Revenue for Dell’s enterprise solutions and services businesses (servers, storage, networking and services) rose 8 percent to $4.7 billion, an all-time high, Dell claimed.
- Server and networking revenue rose 13 percent.
- Storage revenue grew 23 percent.
- Dell Services revenue grew 10 percent.
Bottom line: Those are pretty good metrics that reveal good growth…
Still, Dell faces challenges. Revenues in the lucrative SMB market rose only 1 percent to $3.7 billion. And Dell warned investors that macroeconomic challenges coupled with a worldwide hard drive issue is putting pressure on its business.
At the same time, Lenovo — citing third-party industry research — claims it has overtaken Dell in terms of worldwide PC market share.
Generally speaking, it sounds like Dell is not participating in the big “consumerization of IT” trend. Dell’s earnings release made no mention of tablets or smart phones. Instead, the company continues to emphasize a growing focus on storage, networking and cloud integration services. And in many cases, those sales involve channel partners…