Dell sees profits increase 52%, analysts still unhappy

By on May 20, 2010 at 5:38 PM
General May 20, 2010

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Dell, the third-largest PC maker in the world, showed strong growth in Q1 of 2010 as profits totaled $441 million — or $0.22 per share — up 52% from a year ago. Revenue climbed 21% (to $14.9 billion) from the previous quarter thanks to a 21.4% increase in PC shipments; a spike which Dell attributed to, “the early stages of a corporate IT refresh.” Dell also saw a boost from server and network revenue (up 39% to $1.8 billion), mobility revenue (up 18% to $4.6 billion), and desktops sales (up 13% to $3.6 billion). Even with all this this great news Dell’s stock price dropped 5.2% in after hours trading as both the earnings per share figure and gross margin figure fell short of The Street’s expectations.

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  • MikeD

    Shoot the analysts. There is no pleasing these guys.

  • bluehorseshoe

    Equipment and servers suck. They give away servers and services due to server fails (sometimes hitting a 40% clip on deployment/server side) just to keep clients and billing, hence the shrinking margins. Services margins losing out to local competition. Blended packages are becoming harder for them to sell. They just can’t figure it out…

    • Kirk

      Wow. I guess you have never used or worked on Dell servers before. They are my higher quality than HP servers.

      • bluehorseshoe

        Work with them by the tens of thousands. Wouldn’t make the comment if I didn’t.

  • Kevin

    they are douche bags.. they have been raising all of their networking prices and reducing discounts claiming their costs went up

  • Steven

    EPS actually beat the consensus estimate of $0.27 by reporting $0.30. The only estimate that wasn’t beat was gross margin.

  • Scott

    Freaking A does this piss me off about the United States. I love my country, but damn do I hate how it’s run. A company that posted good numbers, still has their stock drop because some group of fat ass A-holes thought they should have done better. All this does is hurt the business and the consumer. Now Dell will think they need to cut costs. You know how? Lay offs, cheaper components, cheaper labor…

    It sickens me to think that our “economy” is being run by peoples “thoughts”. Am I the only sane person that finds this wrong?

    • bluehorseshoe

      Yeah…Lehman Brothers posted some damn good numbers too.

    • geo

      Actually, the stock price dropped due to Dell’s forecast for the future. Remember that, the stock market is all about what is going to happen, not what has.

  • Jarrett

    Anal-ysts are not happy because Dell continues to show piss poor profits. $15 billion is sales and they can only manage a profit of $441 million. If their profits were higher Wall street would have had a different reaction.

    All PC companies have the same issue, profits. They have to fight each other on price. Their are two companies that benefit from this, Microsoft and Apple. Microsoft profits are usually 20-25%. Apple’s profits are about the same.

    Now, if Dell would go the vertical integration route (would take a long time and a huge R&D budget) they could eventually raise their profitability. As long as they are in bed with Microsoft Dell will not be the pitcher, only the catcher. Maybe their push into phones and tablets will help….. couldn’t hurt right, look at all the money they made with their MP3 players.

    • bluehorseshoe

      Dell is trying to recoup margins via services, hence the Perot purchase. Problem is they are too top heavy, thus cutting into the margins on the services side. The one-stop-shop model doesn’t always work when you’re beating down your customers for rates that are beyond local competition. The hardware gets them in the door, but just like the days of when the VAR’s ruled the channel, Dell is now suffering from the same fate of low margin product, even if it’s direct.

      • anacotsteel

        You luv me, but do I luv u?

  • iName

    STREAK

  • Ya Ya Mugumbo

    In Obama’s America, all stocks lose value.

  • http://www.twitter.com/tinavane tinavane

    @Ya Ya Mugumbo, preach baby the white has even loss it’s value

    Posted from BGR Mobile (iPhone).

    • Officer O’Malley

      Huh? Put down the crack pipe.

  • http://whatabitchbro.com WHATABITCHBRO.COM

    dell sucks

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