Dell Misses On Q2 Revenue, Net Income Up 60 Percent But Cuts Q3 Outlook

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Dell reported mixed earnings this afternoon for the second quarter of fiscal year 2012. Revenue in the quarter was $15.7 billion, up 1 percent over last year. GAAP earnings per share was $0.48, up 71 percent; non-GAAP EPS was $0.54 cents, up 69 percent. The company blew past EPS expectations, Dell missed slightly on revenue. Analysts expected non-GAAP EPS of $0.49 on revenue of $15.75 billion.

Cash flow from operations grew to a record $2.4 billion Non-GAAP net income came in at $1 billion for the quarter, up 60 percent from the same quarter last year. Dell ended the quarter with a record high $16.2 billion in cash and investments and repurchased $1.1 billion in stock in the quarter.

Dell said the growth in its enterprise solutions and services, particularly in serverm storage, data management, security and cloud service, continued to drive the company’s profitability in the fiscal second quarter as operating income rose significantly on a 1 percent revenue increase.

Revenue for Dell’s commercial business was $12.8 billion, up 1 percent from a year ago. Enterprise solutions and services revenue grew 4 percent to $4.6 billion in the quarter and now represents 35 percent of Dell’s commercial revenue. Servers and networking revenue increased 9 percent year over year. Dell Services revenue grew 6 percent to $2 billion.

Growth countries outside of the U.S. and Canada, Western Europe and Japan increased revenue 14 percent over the previous year and now account for 28 percent of Dell’s total revenue. Specifically, India and China were up 21 and 20 percent, respectively.

Michael Dell, chairman and chief executive officer of the company said in a release: “We continue to see great momentum in the high-growth areas of our business, which is a direct reflection of the discipline and strong execution our global Dell team is applying to help solve real-world challenges for our customers. We’re creating efficiency across every step of the IT value chain and ultimately enabling all customers—from home users to large businesses and government organizations—to achieve the outcomes that matter most to them.”

In the third quarter, Dell expects to see revenue roughly flat relative to Q2.