Dell reported results for its fourth quarter of fiscal year 2008, with revenue up 10 percent year-over-year to $16 billion, unit growth of 19 percent, operating income of $776 million and earnings per share of $0.31. Revenue for the full fiscal year was $61.1 billion, an increase of 6 percent year-over-year and earnings per share grew 15 percent to $1.31.
Cash from operations totaled $1.2 billion, while cash and marketable securities at the end of the quarter were $9.5 billion. Dell resumed its share-repurchase program during the quarter, and spent $4 billion to repurchase 179 million shares of common stock. In the first quarter of fiscal 2009 the company expects to spend at least $1 billion to repurchase its shares.
"Execution against our priorities continues to drive growth," said Michael Dell, chairman and CEO. "As businesses and consumers worldwide join the Connected Age -- one that's underscored by more data, more devices and more users -- we see enormous opportunities to enable them to Simplify IT and participate."
Earnings per share in the quarter were affected by the following items:
In the company's fiscal 2007 fourth quarter, earnings per share were affected by the following items:
These items for both quarters are recognized in different tax jurisdictions and therefore are tax-effected at different rates.
$207 million reduction in the provision for employee bonuses, or seven cents per share;
$89 million in expense, or three cents per share, in investigation related costs; and,
A $36 million one-time gain on the sale of real estate, in financing and other income, or one cent per share.
The company is addressing cost and productivity across its entire operations. Over the last eight months the company has reduced its global headcount by 3,200, excluding acquisitions. Dell has also accelerated its product refresh cycles with a renewed emphasis on cost, product design and product features. The award winning Dell Inspiron 1525 went from concept to manufacturing in less than half the time of its predecessor and costs were reduced $70 per unit.
"While Dell continues to drive towards a world-class cost structure and competitiveness we have much work to do," Mr. Dell said. "Resurgent growth puts us on a strong footing to improve our cost position, scale expenses and enhance productivity across our business. I am confident that from this base we can continue to drive improvements in profitability."
Dell's achievements in the fourth quarter were led by continued growth in countries outside the United States, where sales were up 16 percent and accounted for 49 percent of the company's total revenues. Growth was especially strong in BRIC (Brazil, Russia, India and China) countries where revenue grew 36 percent on a 50 percent increase in units. Growth was also strong in Asia Pacific and Japan where revenue grew 28 percent and units were up 41 percent. Americas International revenue grew 22 percent.
Driven by new products, the company increased mobility revenues by 24 percent and unit shipments were up 37 percent. During the year, Dell won more than 400 awards for its products and its notebooks were among the most recognized, demonstrating the company's significant attention to innovative design and customer experience. Services revenue was up seven percent and the company's deferred services revenue balance grew 25 percent to $5.3 billion.
Q4 Execution Highlights Against Business Priorities Include:
Regional Highlights
Company Outlook
The company will continue to incur costs as it realigns its business to improve growth and profitability. While the company believes these actions are necessary to drive long-term sustainable value, they may adversely impact the company's near-term performance. In addition the company's results could be adversely impacted by more conservative spending by its customers. The company is, however, benefiting from accelerating growth and an improving mix of products and geographic regions, and the company expects to achieve substantial improvements in cost and productivity.
