Dell Record Fiscal Year 2012 Highlighted By Enterprise Solutions and Services Strength
Revenue of $62.1 billion for the fiscal year, $16 billion in Q4
Record enterprise solutions and services revenue of $18.6 billion for fiscal year, $4.9 billion in Q4
Cash flow from operations of $5.5 billion for fiscal year, $1.8 billion in Q4
Dell’s further expansion as an enterprise solutions and services provider highlighted the company’s most successful financial year ever.
New corporate highs were achieved for a full fiscal year with revenue of $62.1 billion, earnings per share of $1.88 (GAAP) and $2.13 (Non-GAAP), and revenue from enterprise solutions and services of $18.6 billion.
“Our customers think of Dell in much broader terms now, trusting us with their comprehensive IT needs, from the datacenter to the device,” said Michael Dell, chairman and CEO. “We are more committed than ever to both developing and investing in innovative solutions that deliver greater value and better outcomes for our customers.”
“The expanding mix of revenue and earnings from enterprise solutions and services is critical to our future,” said Brian Gladden, Dell chief financial officer. “Our full-year results are a strong reflection of the significant progress we made this year on our strategic priorities.”
Results
Revenue in the quarter was $16 billion, a 2 percent increase over the previous year. Dell had an extra week in its fiscal year 2012 that was incorporated into the company’s Q4. Revenue for the 2012 fiscal year was $62.1 billion, a 1 percent increase.
GAAP earnings per share in the quarter was 43 cents, down 10 percent from the previous year; non-GAAP EPS was 51 cents, down 4 percent. For the fiscal year, GAAP EPS was $1.88, up 39 percent year over year and Non-GAAP EPS was $2.13, up 34 percent, both records.
GAAPoperating income for the quarter was $931 million, or 5.8 percent of revenue. Non-GAAP operating income was $1.1 billion, or 7.1 percent of revenue. For the fiscal year, GAAP operating income was $4.4 billion and non-GAAP operating income was $5.1 billion, both records.
Cash flow from operations in the quarter was $1.8 billion, and Dell ended Q4 with $18.2 billion in cash and investments. For the fiscal year, Dell spent $2.7 billion to purchase 178 million shares of Dell stock.
Fiscal-Year 2012 Fourth Quarter and Full Year Highlights
Fourth Quarter Fiscal Year
(in millions)
FY12
FY11
Change
FY12
FY11
Change
Revenue
$16,031
$15,692
2%
$62,071
$61,494
1%
Operating Income (GAAP)
$931
$1,145
(19)%
$4,431
$3,433
29%
Net Income (GAAP)
$764
$927
(18)%
$3,492
$2,635
33%
EPS (GAAP)
$0.43
$0.48
(10)%
$1.88
$1.35
39%
Operating Income (non-GAAP)
$1,143
$1,286
(11)%
$5,135
$4,149
24%
Net Income (non-GAAP)
$913
$1,018
(10)%
$3,952
$3,106
27%
EPS (non-GAAP)
$0.51
$0.53
(4)%
$2.13
$1.59
34%
Information about Dell’s use of non-GAAP financial information is provided under “Non-GAAP Financial Measures” below. Non-GAAP financial information excludes costs related primarily to the amortization of purchased intangibles, severance and facility-action costs, a merger termination fee, certain settlement costs and acquisition-related charges. All comparisons in this press release are year over year unless otherwise noted.
Dell Services revenue grew 12 percent to $2.2 billion and represented 14 percent of Dell’s business. The transactional services business increased 14 percent with strong attach rates of Dell premium support services and the outsourcing business grew 8 percent. Services backlog increased 11 percent to $15.5 billion.
Dell-owned storage grew 33 percent to $463 million, led by offerings based on Dell-owned intellectual property, including Compellent, which had sequential growth of more than 60 percent.
Server and networking revenue grew 6 percent.
Business Units and Regions:
Large Enterprise had revenue of $4.9 billion in the quarter, a 5 percent increase with broad-based growth across both client and enterprise solutions and services. Services revenue increased 18 percent. Operating income for the quarter was $461 million, or 9.4 percent of revenue. Revenue for the full year was $18.5 billion, up 4 percent from the previous year.
Public revenue was $3.9 billion, a 1 percent decrease. The segment was affected by continued weakness in U.S. Federal and Western Europe. Services revenue increased 7 percent and Dell IP storage revenue was up 32 percent. Operating income for the quarter was $327 million, or 8.3 percent of revenue.
Small and Medium Business revenue grew 6 percent to $4 billion. Enterprise solutions and services revenue was up 18 percent during the quarter to an all-time high of $1.2 billion. Services growth was 28 percent in the quarter. SMB delivered $412 million in operating income, or 10.3 percent of revenue, driven by the better mix of higher-margin enterprise solutions and services.
Consumer revenue was $3.2 billion, a 2 percent decline for the quarter. Operating income was $39 million or 1.2 percent of revenue, a 43 percent decline. Revenue weakness was largely concentrated in the United States, while revenue from non-U.S. countries grew 10 percent.
Asia-Pacific and Japan revenue grew 10 percent – including 15 percent growth from China – and EMEA increased 8 percent in the quarter. Americas was down 3 percent. Revenue in Growth Countries – defined as those outside the U.S., Canada, Western Europe and Japan – increased 8 percent in the quarter and 12 percent for the fiscal year. Revenue in the BRIC countries increased 10 percent in the quarter and 15 percent for the fiscal year.
Company Outlook:
The company will continue to prioritize operating income and cash flow. For fiscal 2013, the company expects non-GAAP earnings per share to exceed the record $2.13 it delivered in fiscal 2012 and expects to continue strong execution, with cash flow from operations exceeding net income. For Q1, the company expects revenue to decline approximately 7 percent sequentially, which aligns with normal seasonality adjusted for the fourteenth week.
About Dell
Dell Inc. (NASDAQ: DELL) listens to customers and delivers worldwide innovative technology, business solutions and services they trust and value. For more information, visit www.dell.com. As previously announced, the fourth-quarter analyst call with Michael Dell, chairman and CEO; Brian Gladden, CFO; and, Steve Felice, president and chief commercial officer, will be webcast live today at 4:00 CST and archived at www.dell.com/investor. To monitor highlighted facts from the analyst call, follow on the Dell Investor Relations Twitter account at: http://twitter.com/dellshares or hashtag #DellEarnings. To communicate directly with Dell, go to www.dell.com/dellshares.
