By
Anders Bylund
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More Articles
February 29, 2008
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On Feb. 28, computing giant Dell (Nasdaq: DELL ) released fourth-quarter 2008 earnings for the period ended Feb. 1. Let's see how the company measured up to our expectations.
- Dell shipped out 19% more hardware units this quarter than it did a year earlier. But for various reasons, the average selling price slipped about 8% to land the total revenue improvement at 10.5%.
- One of those reasons is proportionally higher sales in emerging markets like China, Russia, and Brazil, where low margins come with the territory.
- While the GAAP numbers may look bleak, Dell is actually making more cash this year than last, including a much stronger structural cash flow of $833 million in the quarter.
(Figures in millions, except per-share data.)
Income Statement Highlights
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Q4 2008
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Q4 2007
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Change
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Sales
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$15,989
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$14,470
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10.5%
|
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Net Profit
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$679
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$726
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(6.5%)
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EPS
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$0.31
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$0.32
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(3.1%)
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Diluted Shares
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2,201
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2,251
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(2.2%)
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Get back to basics with the income statement.
Margin Checkup
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Q4 2008
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Q4 2007
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Change*
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Gross
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18.8%
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17.1%
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1.7
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Operating
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4.9%
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5.7%
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(0.8)
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Net
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4.2%
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5.0%
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(0.8)
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*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
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Assets
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Q4 2008
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Q4 2007
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Change
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Cash + ST Invest.
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$7,972
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$10,298
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(22.6%)
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Accounts Rec.
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$5,961
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$4,622
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29.0%
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Inventory
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$1,180
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$660
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78.8%
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Liabilities
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Q4 2008
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Q4 2007
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Change
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Accounts Payable
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$11,492
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$10,430
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10.2%
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Long-Term Debt
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$362
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$569
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(36.4%)
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The balance sheet reflects the company's health.
Cash Flow Highlights
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Q4 2008
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Q4 2007
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Change
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Cash From Ops.
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$1,197
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$1,221
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(2.0%)
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Capital Expenditures
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$195
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$330
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(40.9%)
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Free Cash Flow
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$1,002
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$891
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12.5%
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Owner Earnings
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$833
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$525
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58.7%
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Free cash flow is a Fool's best friend.
Competitive Context
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Market Cap
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Trailing P/E Ratio
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CAPS Rating
|
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International Business Machines (NYSE: IBM )
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$158,540
|
15.9
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***
|
|
Hewlett-Packard (NYSE: HPQ )
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$123,190
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16.1
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****
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Apple (Nasdaq: AAPL )
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$112,740
|
28.1
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***
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Dell
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$46,160
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15.5
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**
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Sun Microsystems (Nasdaq: JAVA )
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$15,160
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20.0
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***
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Using the latest reported numbers from Capital IQ. Keep your partners close and the competition in your vest pocket.
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