Dell Q2 Earnings: A Reality Check for PartnerDirect Members
Dell’s Q2 fiscal 2012 earnings results, disclosed today, included a reduced revenue forecast that disappointed Wall Street and investors. But The VAR Guy has a piece of advice for Dell PartnerDirect resellers and VARs: Ignore Wall Street and focus on this reality check to help you pinpoint where Dell is heading next.
Here’s what Dell said about Q2 fiscal year 2012 results, plus The VAR Guy’s spin on the situation.
- Dell said: Revenue in the quarter was $15.7 billion, up 1 percent over last year and up 4 percent sequentially — but slightly short of analyst’s expectations, AP reported.
- The VAR Guy said: Not too bad, considering Dell is trying to shift from a heavy dependence on notebooks and PCs toward servers, storage, networking, services and cloud computing.
2. Net Income:
- Dell said: Net income rose 63 percent to $890 million.
- The VAR Guy said: That’s a huge net income gain amid relatively flat revenue growth. It looks like Michael Dell is running the company lean-and-mean.
- Dell said: Dell ended the quarter with a record high $16.2 billion in cash and investments.
- The VAR Guy said: That’s a lot of cash. Time for Dell to buy more companies? Hmmm…
4. Large Enterprise:
- Dell said: Up 1 percent to $4.6 billion amid strong demand for servers and services.
- The VAR Guy said: Amid one-percent growth… what were the weak areas?
5. Public Vertical:
- Dell said: Revenue was $4.5 billion, down 3 percent from Q2 last year.
- The VAR Guy said: Sounds like government spending remains challenging…
6. Small and Medium Business:
- Dell said: Revenue was $3.7 billion, up 5 percent.
- The VAR Guy said: A decent increase considering the difficult economy. Dell likely needs to applaud PartnerDirect members for its SMB sales…
7. Key Products & Services:
- Dell said: The company specifically mentioned strong demand for Dell SecureWorks, EqualLogic, Compellent and Dell KACE. Plus, Dell expects to complete the Force 10 Networks acquisition in Q3.
- The VAR Guy said: Attention PartnerDirect members… If you’re focused on Dell you need to embrace the solutions listed above…
8. The Bottom Line:
- Dell said: The company reported strong Q2 results driven by enterprise solutions and services.
- The VAR Guy said: Wall Street was disappointed by Dell’s reduced revenue forecast. But partners should ignore the noise on Wall Street and focus on item seven above.
That’s all for now. The VAR Guy will be back with more earnings insights later this week.
Additional reporting by David Courbanou.