Dell Q209 Results Highlights
- Dell’s revenues continue to decline at a similar rate to Q109
- As mainly a hardware supplier Dell should be one to lead the upturn in coming quarters
- BRIC countries show a 14% growth in Dell’s financial quarter’s results
- Although it no longer publishes regional segment data I believe Dell has done particularly well in EMEA in Q1 and Q2
Dell Publishes Revenues Down 22% to $12,764 Million
Dell recently reported its Q210 (May to July) financial results. It showed revenues down 22% on Q209 – only marginally better than the –23% suffered in Q110. Almost all reported segments showed decline, with the exception of its Brazil, Russia, India and China (BRIC) region which showed a 14% increase. Desktop PCs were down 28%, servers by 21% and mobile PCs by 18%, Services were reported as 20% down, while Software and Peripherals were down just 11%. A ‘calendarised’ view of revenues by main offering for Dell is shown in Figure 1.
Although – like Lenovo – Dell is one of the worst performing PC Brands, its business is showing a similar curve to all major vendors (see Figure 2 for a comparison of PC related growth).
Dell’s Recent Results Were Most Certainly Better in EMEA than in the Americas or Asia Pacific
Dell decided at the beginning of the year to discontinue the publication of revenue results by major regions, preferring to break out BRIC countries as a group only (see above). It’s a shame for those in EMEA as I believe Dell continues to out-perform other vendors once its sales have been converted to local currency. My estimates of Dell’s revenues by region for Q109 and Q209 (along with a calendarised view of its published results for previous quarters) are shown in Figure 3.
Dell Announcements Focus on CSR and Green Issues
Dell was busy launching products and getting its customers ready for the launch of Microsoft Windows Server 2008 SP2 and Windows 7 (expected in October this year). It also made a number of announcements on CSR and Green subjects. In particular:
- It reported that it had increased its global renewable power sourcing to more than 25% of the electricity it uses
- It joined the Prince’s Rainforests project
- It estimated that its own energy saving initiatives will save it more than $5.8 million per year
It also announced collaborative activities with Brocade for the Data Centre and an extension of its partnership with VMWare for virtualisation.
Dell was a leader in introducing recycling of its products in the US a few years ago, when it had been addressed in EMEA in the Waste Electrical and Electronic Equipment (WEE) legislation in the EU. Selling off its Tennessee remanufacturing operation to GENCO Supply Chain Solutions recently indicates that the period in which it had to drive this activity directly is at an end.
Dell’s Hardware Focus Should Help it Recover Quickly at the Head of the Upturn
Dell’s business has suffered from its focus on hardware products and large business customers. Its diversification of the last few years to adopt indirect channels and to address consumers and SMBs more effectively have helped it off-set some of the effects of the economic downturn, but it has yet to show a significant improvement. On the positive side its net profits ($472m for its FQ210) were down by less than in earlier recent quarters.
As we reach the bottom of the ITC downturn so Dell’s speciality will help it be one of the first to recover. I am forecasting that Hardware will lead the upturn ahead of other categories in coming quarters.
Filed under: Dell Tagged: | Brocade, Dell, GENCO, Martin Hingley, WMWare
