Dell: Fiscal 4Q12 Financial Results

      For storage only (without services)

Dell, Inc. reported financial results for 4Q12 and FY12 ended February 3, 2012.

For the quarter, storage revenues (without services) are up 9% sequentially and down 13% year to year. For FY12, they are decreasing 15% to less than $2 billion. It was better for FY10 with $2,2 and even in FY09 with $2.4 billion. Imagine the poor results if Dell didn’t acquire Compellent and EqualLogic …

Storage is now only 3% of global sales.

Dell-owned IP storage (Compellent and EqualLogic) growth accelerated yearly 33% to $463 million in the most recent quarter and 19% sequentially, with Compellent seeing over 60% sequential growth in revenues.

Abstracts of the earnings call transcript:

Brian Gladden, CFO:
"We’re still seeing some uncertainty around the hard disk supply and pricing. We expect drive mix management to continue to be challenging but not as impactful as in the fourth quarter.
"We clearly talked about coming into the quarter some of the concerns we had around margins. And talking about the three items that we raised for hard disks, we had uncertainty coming into the quarter. We had significant inflation that came from the hard disk situation. We did effectively raise prices to offset that. And the teams did a great job of getting supply to support the demand that we had, but we just didn’t get the mix of drives that we wanted, and it really forced us to sell lower or less configured, lower-end systems and prevented us from accessing higher-margin, more highly configured systems. That played out across the portfolio but especially in consumer. And also I would say, within our aftermarket sales of hard disk was in the S&P business. So that’s the one dynamic that I think we didn’t fully understand coming into the quarter what that mix was going to do to us.
"As you think about the quarter, we had an order of magnitude of about $150 million of inflation from hard disk costs, and that was pretty consistent probably with what the market saw.
"The hard disk situation should get better as we move throughout the first half of the year."

Mike Dell, chairman and CEO:
"There’s obviously some rebalancing as we position Compellent more to the higher end. But the whole thing, as you said, 33% growth year-over-year is strong. We’re – at 93% of our revenue now is our own IP, so we’re pretty much through the transition and believe we can grow this business quite nicely. But it is a competitive environment. Obviously, having a full portfolio of servers, storage, networking, services and increasingly software is very helpful in many of the opportunities that we find."