Dell (DELL) reported preliminary results for the first quarter of fiscal year 2008, with revenue of $14.6 billion, operating income of $947 million and earnings per share of $0.34. Analysts were only expecting the company to earn $0.26 on $14.0 billion in revenue.
The company took deliberate actions to concentrate on solutions sales, realign pricing and drive a better mix of products and services in the quarter. While these actions slowed overall unit growth, a 14 percent year-on-year improvement in average selling prices contributed to improved gross margins, revenue growth of three percent and operating margins of 6.5 percent.
In the quarter, gross and operating income margins were positively affected by a favorable decline in component costs.
Nothing like having your suppliers be in worse shape than you are to improve profitability, eh?
The company noted, of course, that not only this year’s numbers but last years are subject to revision based on the ongoing investigation into the company’s accounting practices. Investors must hope they can put the issue behind them once and for all, and sooner rather than later. For myself, not being able to trust the numbers is keeping me on the sidelines.Like this article? Why not try out: