By
Anders Bylund
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More Articles
November 30, 2007
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On Nov. 29, Dell (Nasdaq: DELL ) released third-quarter 2008 earnings for the period ended Nov. 2, 2007.
- At first glance, it's hard to complain about 9% revenue growth and even better profit improvements in this hesitant economic environment -- but then you have to remember that HP is on an annual sales growth tear of about 14% now, and Apple (Nasdaq: AAPL ) is strutting a 24% revenue boost.
- The geographical revenue mix is shifting around just a bit -- sales in the Americas clocked in 5% above the year-ago result, while the rest of the world wanted 13% more Dell products this time.
- The product mix isn't static, either. Servers and storage systems are in high demand, along with notebook computers. However, desktop sales are actually on the decline.
- Dell used to buy back upward of $1 billion worth of its own stock frequently, but turned off that faucet entirely about a year ago. With SEC investigations and restatements in the rearview mirror, the company plans to start buying shares again this December.
(Figures in millions, except per-share data.)
Income Statement Highlights
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Q3 2008
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Q3 2007
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Change
|
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Sales
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$15,646
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$14,419
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8.5%
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Net Profit
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$766
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$601
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27.5%
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EPS
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$0.34
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$0.27
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25.9%
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Diluted Shares
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2,266
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2,238
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1.3%
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Get back to basics with the income statement.
Margin Checkup
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Q3 2008
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Q3 2007
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Change*
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Gross
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18.5%
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16.6%
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1.9
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Operating
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5.3%
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5.1%
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0.2
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Net
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4.9%
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4.2%
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0.7
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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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Q3 2008
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Q3 2007
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Change
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Cash + ST Invest.
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$12,605
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$9,318
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35.3%
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Accounts Rec.
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$7,716
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$6,333
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21.8%
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Inventory
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$1,102
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$680
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62.1%
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Liabilities
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Q3 2008
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Q3 2007
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Change
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Accounts Payable
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$11,411
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$10,335
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10.4%
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Long-Term Debt
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$392
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$579
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(32.3%)
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The balance sheet reflects the company's health.
Cash Flow Highlights
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Q3 2008
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Q3 2007
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Change
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Cash From Ops.
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$998
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$936
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6.6%
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Capital Expenditures
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$172
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$180
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(4.4%)
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Free Cash Flow
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$826
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$756
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9.3%
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Owner Earnings
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$747
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$538
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38.8%
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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
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CAPS Rating
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International Business Machines (:IBM)
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$146,570
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15.9
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***
|
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Hewlett-Packard (NYSE:HPQ)
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$131,002
|
19.0
|
****
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Dell
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$54,490
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19.4
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**
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EMC (NYSE:EMC)
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$41,000
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27.5
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*****
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Sun Microsystems (NASDAQ:JAVAD)
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$17,110
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30.2
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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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