Dell Achieves Record Revenue in Third Quarter

Sales of Enterprise, Notebook Products Rise 40 Percent

Langen (pts054/10.11.2000/17:45) Combined sales of enterprise products and notebook computers increased more than 40 percent, as Dell achieved record unit shipments, revenue, operating and net income, per-share earnings, and return on invested capital during its fiscal third quarter, which ended Oct. 27.

Dell's quarterly net revenue rose 22 percent to $8.3 billion, marking the 27th consecutive quarter of sequential revenue growth. The richer mix of high-end product sales helped drive a 40-percent gain in net income, to $674 million. Earnings per share for the period were 25 cents. Comparisons exclude an acquisition charge of $194 million from the year-ago quarter.

Third Quarter Year to Date
(in millions, except share data)
FY '01 FY '00 Change FY '01 FY '00 Change
Revenue $8,264 $6,784 22% $23,214 $18,463 26%
Operating Income* $818 $650 26% $2,179 $1,944 12%
Net Income* $674 $483 40% $1,802 $1,424 27%
Earnings Per Share* $0.25 $0.18 39% $0.66 $0.52 27%
Return on Invested Capital* 316% 281% -

*FY '00 data exclude a $194 million charge for purchased in-process R&D related to an acquisition.

"Our worldwide shipments of servers and notebooks grew significantly faster than the overall industry rate," said Michael Dell, the company's chairman and chief executive officer. "We added more than a point of market share and moved closer to the No. 1 ranking in both product categories."

"In servers, Dell's unit growth was twice that of our largest competitor. Our notebook business alone recorded more than $8 billion in sales over the past four quarters, and expanded 57 percent during that period."

According to Mr. Dell, the company's successful application of its unique, customer-focused direct business model to newer product and service categories continues uninterrupted. Dell's growth in combined shipments of servers and notebook PCs was 15 points higher than the reported industry rate. Company sales of services and peripheral products in the third quarter were $1.5 billion, up 25 percent year-over-year and 14 percent sequentially. Services revenue alone exceeded $665 million.

"More than 50 percent of our revenue - and about two-thirds our operating profit - came from sales of enterprise products, notebooks and services," he said. "We're seeing history repeat itself: as they did with desktop PCs, customers of higher-end computing products and services are increasingly choosing to purchase them directly, from Dell."
The efficiencies of Dell's direct model allowed the company to quickly pass along lower component costs to customers, even as it posted a year-over-year increase in gross margins, to 21.3 percent. Operating expenses were 11.4 percent of revenue, down sequentially for the second straight quarter. Net income of 8.2 percent of sales was up 1.1 points, and tied a company record.

Quarterly operating results sustained the company's strong financial position. Cash from operations was more than $1 billion, part of which was used to buy 21 million shares of Dell stock. The company has repurchased 850 million shares, at an average cost of about $7 each, since the buyback program began 14 quarters ago. Cash and investments were $7.8 billion at the end of the quarter. Return on invested capital for the period was 316 percent, a company record and the sixth consecutive quarter above 200 percent.

By the end of the quarter, sales through www.dell.com had grown to an annual run rate of $16 billion, up from almost $12 billion a year ago. By itself, the current run rate for Dell's Web-enabled revenue would rank No. 110 on the Fortune 500 roster of companies.

Americas, Asia-Pacific/Japan Highlight Regional Performance
Dell's global third-quarter product shipments rose 21 percent year-over-year, faster than the industry average, as the company maintained its No. 2 worldwide ranking.

In the Americas region, Dell revenue was up 24 percent, led by a 34-percent increase in sales to small businesses and consumers. Revenue from outside of the U.S. was up sharply, including a 56-percent increase in Latin America.
Dell's sales in Europe, the Middle East and Africa (EMEA) increased 7 percent. Combined sales to small businesses and consumers in the region were up 25 percent from last year's third quarter. In the United Kingdom, company revenue increased nearly 20 percent from year-ago levels.

Strong sales to large corporate customers pushed Dell to 39-percent quarterly revenue improvement in Asia-Pacific/Japan. In China, sales growth exceeded 70 percent. During the quarter, Dell initiated direct sales in India, one of the region's fastest growing national markets.

Dell Extends Notebook, Enterprise Momentum
Shipments of Inspiron and Latitude notebook computers were up 50 percent. Dell's notebook volume increase was 1.5 times the worldwide industry rate, 1.7 times the U.S. average. Dell's portable volumes in Asia-Pacific/Japan expanded at more than double the rate of all companies.

Total third-quarter sales of Dell servers, storage products and workstations-collectively known as enterprise systems-jumped 37 percent from one year ago. Shipments of PowerEdge servers grew by about one and one-half times the industry rate worldwide, where it ranks No. 2. Server shipments in EMEA grew 1.6 times the industry rate, and nearly seven times the pace of the regional industry leader. In Asia-Pacific/Japan, Dell server shipments were up nearly 70 percent, almost two and one-half times overall industry growth. According to industry analysts, Dell added more than two points of server market share in Asia-Pacific, and more than four share points in Japan.

Growth in unit volumes of Dell Precision workstations, which rank No. 1 worldwide, and PowerVault storage products was exceptionally strong. Revenue from external storage products rose 73 percent-26 percent sequentially-as the company introduced a new low-end network-attached product and enhanced its storage-area network (SAN) offerings during the quarter. Industry analysts rank Dell as No. 2 in the emerging worldwide SAN market.

Kurzprofil:
Dell ist mit einem Umsatz von 28,5 Milliarden Dollar in den letzten vier Quartalen der weltweit führende Direktanbieter von Computersystemen und einer der ersten Anbieter von Produkten und Services, die Kunden für den Aufbau ihrer Internet-Infrastrukturen benötigen. Das Unternehmen liegt auf Platz 56 der Fortune 500-, auf Platz 154 der Fortune Global 500- und auf Platz drei der Fortune "most admired"-Liste von Unternehmen. Dell entwickelt, produziert und konfiguriert seine Produkte und Services nach individuellen Kundenanforderungen und bietet eine umfassende Auswahl an

Software und Peripheriegeräten. Informationen zu Dell und seinen Produkten können im Internet unter www.dell.at abgerufen werden.

Für zusätzliche Informationen wenden:

TBWA/TELL Werbeagentur G.M.B.H. Dell Computer GmbH / Pressestelle
Cindy Nägeli-du Pont Nerses Chopurian
Porzellangasse 4 / 2. Stiege / 3. Stock Monzastraße 4
1090 Wien D-63225 Langen
Tel: (+43-1) 316 00-0 Tel: (+49-6103) 766-3271
Fax: (+43-1) 316 00-85 Fax: (+49-6103) 766-9655
naegeli-dupont@tbwa-tell.com Austria_presseoffice@dell.com
www.tbwa-tell.at/tbwa_pr.htm www.dell.at

Aussender:	pts - Presseinformation (A)
Ansprechpartner:	Cindy Nägeli-du Pont
Tel.:	+43/1/316 00-0
E-Mail:	naegeli-dupont@tbwa-tell.com