Not bad. That's probably about the worst thing that can be said about Motley Fool Stock Advisor selection Dell Computer's (Nasdaq: DELL) third-quarter report. After the bell yesterday, Dell posted third-quarter revenue growth of 18% to $12.5 billion. Meanwhile, earnings per share jumped 27% to $0.33, or $846 million.
And Dell happily points out its own merits.
Overall, the company shipped a combined 8 million servers, notebook computers, and desktop computers, notching an industry record. Powered by a 35% increase in notebook volume sales, Dell's worldwide shipment growth of 22% doubled that of the rest of the industry, a list that includes Hewlett-Packard (NYSE: HPQ), Gateway (NYSE: GTW), International Business Machines (NYSE: IBM), and Apple (Nasdaq: AAPL). Dell also doubled the growth rate of the rest of the industry in the Europe, Middle East, and Africa region, while tripling that figure in Asia-Pacific and Japan.
Revenues also grew 27% in the Europe, Middle East, and Africa region, while climbing 25% in Asia-Pacific and Japan. Growth in the United States was driven by a 20% increase in spending by business customers.
Declining component prices helped Dell pass cost savings to the consumer, as it offered big discounts and boosted sales. The company also passed on those savings to its shareholders, with operating profit margins clocking in at 8.8% -- the highest in four years. In addition, Dell spent $1.3 billion to repurchase 38 million shares, and so far has bought back a total of 97 million shares this year.
The company also noted that it was on track to sell over 5 million printers this year, while booking over $1 billion in imaging and printing revenue. On a conference call (transcript provided by Thomson StreetEvents; subscription required), Dell Chief Financial Officer Jim Schneider said that laser printer sales accelerated 458% year over year, with inkjet printer sales up 201%. The company is aggressively attacking the market for color laser printers, having introduced three new color laser printers during the quarter.
CEO Kevin Rollins added that the company was on track to reach the $60 billion in annual revenue mark next year -- a year ahead of schedule. Separately, he also said that Dell -- which has long used Intel (Nasdaq: INTC) chips exclusively -- is considering using AMD (NYSE: AMD) server chips in the future (for related coverage on that, check out fellow Fool Bill Mann's piece AMD: When the Levee Breaks).
Dell's third quarter is yet another demonstration of why the company is the class of the industry. And if the third quarter wasn't bad, the fourth quarter doesn't look any worse. Dell expects fourth-quarter shipments to climb 20% year over year, driving revenue growth of 17% to $13.5 billion and boosting earnings per share by 24% to $0.36 per share.
For more on Dell, check out the Dell discussion board, or click on:
David Gardner selected Dell Computer for
Motley Fool Stock Advisor
subscribers in the February 2004 issue. Since then, Dell's up 14.17% versus the Standard & Poor's 500's 3.08% gain. Sign up today with a six-month money-back guarantee to learn more.
Fool contributor Jeff Hwang owns none of the companies mentioned above.
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