Dell`s continued strong growth outside US drives company to record Q1 revenue

Dell exceeded its own robust worldwide growth expectations while achieving record revenue during fiscal first-quarter 2005.

Product shipments for the period ended 30 April were up 25% from the same quarter a year ago; volumes for the rest of the industry increased 14%. Dell growth was 38% in Asia-Pacific and Japan, where the company`s share ranked number two for the first time. Shipments in Europe, the Middle East and Africa increased 37%.

First-quarter company revenue was up 21% to $11.5 billion, higher than Dell`s previous guidance. The company has now met or exceeded guidance to investors for 13 straight quarters. Net earnings were $731 million, or 28c per share, 22% higher than a year ago. Dell`s growth in both product shipments and net income has surpassed 20% for seven consecutive quarters.

"In our industry, only Dell simultaneously creates great customer value, rapid growth and solid profitability," said Kevin Rollins, the company`s president and chief operating officer. "Others sometimes do one or two of those things. Our global team and our shareholders insist on all three." First-quarter operating income was $966 million, up 19% from a year ago despite higher-than-expected costs for random-access memory late in the quarter. Operating expenses as a percent of revenue were 9.6%, matching a company low and better than 9.8% last year.

Dell generated $1 billion in cash from operations during the quarter. Cash and investments at the end of the period totalled $11.9 billion, as the company spent $1.1 billion to repurchase its common stock-up from a planned $600 million at the start of the quarter.

For the fiscal second quarter, Dell anticipates year-over-year growth in product shipments of 24%. Such volumes are expected to produce revenue of about $11.7 billion, up 20%, and per-share earnings of 29c, a 21% increase.

In Europe, the Middle East and Africa, Dell`s growth was broadly based, and nearly double the combined rate of other companies. Dell product shipments were up at least 33% in 14 countries, faster in the top three national markets: the UK, France and Germany.

Shipments of PowerEdge servers in the UK jumped 39%. Dell gained more than three points of server share in the market, to 32%, while the industry leader lost five share points.

The company`s total growth in Asia-Pacific and Japan was more than three times the 11% average of the rest of the industry. Dell China product shipments were up 48%. In Japan, the company rate was 24%, nearly four times that of the industry excluding Dell.

Dell server volumes in Asia-Pacific and Japan increased 33%, almost twice the average of other companies. Dell Japan ranked number one in shipments of standards-based servers for the first time. Already number one in servers in China, Dell now is the top supplier in that product category in the region`s two largest markets.

Dell again scored highly in a major Japanese customer-satisfaction survey, ranking first in after-sale service among personal-computer companies for the fourth straight year in research conducted by a leading business publication.

Shipments of Dell products in the US rose 18% as Dell added two full points to its leading market-share position. Demand from small and medium businesses and consumers was particularly strong, and information-technology spending by large corporate customers continued to improve.

The company`s Americas business outside the US was up 24%, including a 26% volume increase in Canada.

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Dell`s 24% growth in server volumes was markedly ahead of the average of other companies. Revenue from Dell/EMC storage systems rose 25%, as the company focuses its sales efforts around midrange storage-area networks.

During the quarter, the company introduced a new generation of storage systems, along with services and online tools to further simplify storage-area networks. Dell also announced expansions of its relationships with Oracle Corp and SAP AG to make it easier for customers to acquire and use business-critical computing applications from those companies on Dell servers.

First-quarter revenue from software and peripheral products was up 39%, helped by strong demand for Dell printers. The company`s initial US market-share growth in printers is more rapid than in any new product category in Dell history: in just one year, the company has share of more than 10% in inkjet printers, and in the upper teens in all-in-one printers.

Dell already sells printers in selected European and Asian markets, and will introduce its first such products in Japan during the second quarter. The company plans to launch several new printers in the US in the next few weeks.

First-quarter shipments of Inspiron and Latitude notebook computers soared 39%, 12 points faster than category shipments for the rest of the industry. Volumes of the company`s Dimension and OptiPlex desktop computers were up 21%, more than double the rate of the industry excluding Dell.