Dell Reports First Quarter Financial Results

Consolidated statements of income, financial position and cash flows and other financial data follow.

Dell is a trademark of Dell Inc. Dell disclaims any proprietary interest in the marks and names of others.



DELL INC.
Condensed Consolidated Statement of Income and Related Financial Highlights
(in millions, except per share data and percentages)
(unaudited)

			Three Months Ended									% Growth Rates
			May 4,			February 3,			April 29,
				2012			2012			2011		Sequential		Yr. to Yr.

Net revenue
	Products		$	11,423		$	12,925		$	12,059		(12	%)	(5	%)
	Services, including software related			2,999			3,106			2,958		(3	%)	1	%
		Total net revenue		14,422			16,031			15,017		(10	%)	(4	%)

Cost of net revenue
	Products			9,330			10,521			9,436		(11	%)	(1	%)
	Services, including software related			2,025			2,125			2,149		(5	%)	(6	%)
		Total cost of net revenue		11,355			12,646			11,585		(10	%)	(2	%)

	Gross margin			3,067			3,385			3,432		(9	%)	(11	%)

Operating expenses
	Selling, general and administrative			2,009			2,218			2,025		(9	%)	(1	%)
	Research, development and engineering			234			236			195		(1	%)	20	%
		Total operating expenses		2,243			2,454			2,220		(9	%)	1	%

	Operating income			824			931			1,212		(11	%)	(32	%)

Interest and other, net				(32	)		(24	)		(42	)	(32	%)	25	%
	Income before income taxes			792			907			1,170		(13	%)	(32	%)
Income tax provision				157			143			225		9	%	(30	%)
	Net income		$	635		$	764		$	945		(17	%)	(33	%)

Earnings per share:
	Basic		$	0.36		$	0.43		$	0.50		(16	%)	(28	%)
	Diluted		$	0.36		$	0.43		$	0.49		(16	%)	(27	%)

Weighted average shares outstanding:
	Basic			1,759			1,778			1,908		(1	%)	(8	%)
	Diluted			1,774			1,796			1,923		(1	%)	(8	%)

Percentage of Total Net Revenue:
Gross margin				21.3	%		21.1	%		22.9	%
Selling, general and administrative				13.9	%		13.8	%		13.5	%
Research and development				1.7	%		1.5	%		1.3	%
Operating expenses				15.6	%		15.3	%		14.8	%
Operating income				5.7	%		5.8	%		8.1	%
Income before income taxes				5.5	%		5.7	%		7.8	%
Net income				4.4	%		4.8	%		6.3	%
Income tax rate				19.8	%		15.8	%		19.2	%

Net Revenue by Product Category:
Servers and Networking			$	2,017		$	2,220		$	1,973		(9	%)	2	%
Storage				444			500			481		(11	%)	(8	%)
Services				2,071			2,179			1,984		(5	%)	4	%
Software and Peripherals				2,386			2,558			2,567		(7	%)	(7	%)
Mobility				4,236			4,877			4,716		(13	%)	(10	%)
Desktop PCs				3,268			3,697			3,296		(12	%)	(1	%)
	Consolidated net revenue		$	14,422		$	16,031		$	15,017		(10	%)	(4	%)

Percentage of Total Net Revenue:
Servers and Networking				14	%		14	%		13	%
Storage				3	%		3	%		3	%
Services				14	%		14	%		13	%
Software and Peripherals				17	%		16	%		17	%
Mobility				29	%		30	%		32	%
Desktop PCs				23	%		23	%		22	%

Net Revenue by Global Segment: ⁽¹⁾
Large Enterprise			$	4,436		$	4,982		$	4,587		(11	%)	(3	%)
Public				3,466			3,833			3,621		(10	%)	(4	%)
Small and Medium Business				3,477			3,560			3,355		(2	%)	4	%
Consumer				3,043			3,656			3,454		(17	%)	(12	%)
	Consolidated net revenue		$	14,422		$	16,031		$	15,017		(10	%)	(4	%)

Percentage of Total Net Revenue:
Large Enterprise				31	%		31	%		31	%
Public				24	%		24	%		24	%
Small and Medium Business				24	%		22	%		22	%
Consumer				21	%		23	%		23	%

Consolidated Operating Income:
Large Enterprise			$	402		$	467		$	516
Public				271			312			352
Small and Medium Business				389			399			435
Consumer				32			61			170
	Segment operating income			1,094			1,239			1,473
	Broad based long-term incentives			(84	)		(96	)		(97	)
	Amortization of intangible assets			(110	)		(104	)		(92	)
	Severance and facility actions and acquisition-related			(76	)		(108	)		(72	)
	Consolidated operating income		$	824		$	931		$	1,212


Note: Percentage growth rates and ratios are calculated based on underlying data in thousands.

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