On Nov. 29, Dell
- 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
Q3 2008 |
Q3 2007 |
Change |
|
---|---|---|---|
Sales |
$15,646 |
$14,419 |
8.5% |
Net Profit |
$766 |
$601 |
27.5% |
EPS |
$0.34 |
$0.27 |
25.9% |
Diluted Shares |
2,266 |
2,238 |
1.3% |
Get back to basics with the income statement.
Margin Checkup
Q3 2008 |
Q3 2007 |
Change* |
|
---|---|---|---|
Gross Margin |
18.5% |
16.6% |
1.9 |
Operating Margin |
5.3% |
5.1% |
0.2 |
Net Margin |
4.9% |
4.2% |
0.7 |
Margins are the earnings engine.
Balance Sheet Highlights
Assets |
Q3 2008 |
Q3 2007 |
Change |
---|---|---|---|
Cash + ST Invest. |
$12,605 |
$9,318 |
35.3% |
Accounts Rec. |
$7,716 |
$6,333 |
21.8% |
Inventory |
$1,102 |
$680 |
62.1% |
Liabilities |
Q3 2008 |
Q3 2007 |
Change |
---|---|---|---|
Accounts Payable |
$11,411 |
$10,335 |
10.4% |
Long-Term Debt |
$392 |
$579 |
(32.3%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
Q3 2008 |
Q3 2007 |
Change |
|
---|---|---|---|
Cash From Ops. |
$998 |
$936 |
6.6% |
Capital Expenditures |
$172 |
$180 |
(4.4%) |
Free Cash Flow |
$826 |
$756 |
9.3% |
$747 |
$538 |
38.8% |
Free cash flow is a Fool's best friend.
Competitive Context
Market Cap |
Trailing P/E Ratio |
CAPS Rating |
|
---|---|---|---|
International Business Machines |
$146,570 |
15.9 |
*** |
Hewlett-Packard |
$131,002 |
19.0 |
**** |
Dell |
$54,490 |
19.4 |
** |
EMC |
$41,000 |
27.5 |
***** |
Sun Microsystems |
$17,110 |
30.2 |
*** |
Keep your partners close and the competition in your vest pocket.
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