Earnings Cheat Sheet: Dell Beats Profit Estimate Easily, Revenues up 19%

In the shadow of Apple’s (AAPL) spotlight, dominant computer player Dell Inc. (DELL) has been chipping away at a turnaround strategy to recapture the fame. Today, Dell reported its third quarter report after-the-bell and re-appeared from the shadows with a very solid report:

Earnings: Increased by 155% to $.42 per share, or $822 million, compared to $.17 per share, $322 million, in the same period a year ago.

Revenue: Increased 19% to $15.4 billion, compared to $12.9 billion in the prior year.

Actual versus Wall Street Expectations: Earnings of $.42 cents per share came in on the high end of expectations.  The consensus analyst earnings expectation was  $.32 cents per share. Meanwhile, revenues missed the expected $15.8 billion revenue estimate (Thomson Reuters).

Notable Stats: Cash flow was $913 million, and Dell ended the quarter with $14 billion in cash and investments.

Revenue for the commercial business was $12.4 billion, up 24%.

Enterprise solutions and services revenue, which includes Perot Systems, was up 31%.

The company’s EqualLogic storage business grew 66%.

Did You Hear That? Brian Gladden, CFO of Dell Inc said, “Our teams delivered outstanding results in the quarter…We are pleased with our year-to-date revenue growth of 21% and non-GAAP operating margin of more than 6%. These results position us well for a very good financial year, and we remain focused on our commitment to deliver balanced revenue and operating income growth along with solid cash flow generation.”

Commentary: On a technical basis, Dell’s shares dripped below its 50-day and 200-day moving averages recently. Following today’s earnings report, shares are trading above both key moving averages once again. Double digit top-line growth year-over-year is a very impressive achievement for a company of Dell’s size. It is evident Dell’s pricing strategy in the recovery phase of the economy is yielding results. In addition to its major cost cutting plans, Dell’s record earnings this quarter was a testament the company does not have to be first to the party, i.e. laptops and iPads. Dells is sticking to what it knows best and is paying back shareholders on the heels of today’s report.

Disclosure: No positions

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