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November 19, 2009

Dell Q3 revenues down 15% to $12.9 billion

Expects seasonal demand improvement in consumer business for fourth quarter

By CBR Staff Writer

Dell has reported revenues of $12.9 billion for the third quarter of fiscal 2010, a decrease of 15% compared to $15.1 billion for the same period last year. Revenue on sequential basis increased by 1%.

Operating income for the quarter was $577m, a decrease of 43% compared to $1.01 billion for the same period a year ago. Gross margin was 17.3% of revenue including expenses of $102m for organisational effectiveness (OE) actions and $27m for amortisation of intangibles.

Michael Dell, chairman and CEO of Dell, said: “We are seeing improvement in overall underlying IT demand that is continuing into the fourth quarter. The same is true with momentum in Dell’s business, specifically in our large enterprise and SMB segments. The launch of Windows 7 is being very well received by SMBs and consumers, and we’ll see the benefits of that more fully in our fiscal Q4.”

For the quarter, shipments were down 5% from a year ago period and were flat sequentially, though the large enterprise and small and medium business segments had sequential improvements in shipments, revenue and operating income.

The company has posted a net income of $337m or EPS of $0.17 for the quarter, a decrease of 54% compared to $727m or $0.37 for the same period last year.

During the quarter, large enterprise revenue was down 23% to $3.4 billion, public revenue was down 7% to $3.7 billion, small and medium business revenue decreased by 19% to $3 billion, while consumer revenue was down 10% to $2.8 billion, compared to the same period last year.

For the fourth quarter, the company expects seasonal demand improvement in its consumer business, while demand in public is expected to be lower during the quarter. The company expects fourth quarter revenue to improve over the third quarter.

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