Dell put in a strong set of results for the 4th quarter and for last year as a whole. But analysts are left with a sour taste as it looks like Dell will not deliver double digit growth in the current quarter for the first time since the slowdown at the beginning of the decade.
Revenue for the 4th quarter, was $15.2 billion, up 13% from revenue of $13.5 billion last year. Analysts polled by Thomson First Call had expected the company to record $14.8 billion in revenue.
Net income was $1 billion, up 52% from $667 million last year. Revenue for the full year was $55.9 billion, up from $49.2 billion in 2004. Net income was $3.6 billion, a 17% increase from the prior year.
And it looks like Dell has nearly concluded their transition from a low cost provider of PC's mainly to small and medium sized businesses to a broad provider of a wide array of hardware for major enterprises around the world.
For Dell now provide servers and storage systems and hi-end PC's and laptops. And these categories seem to have driven much of their revenue and earnings growth. That and international operations particularly in Europe and Asia.
The big question is as Dell behaves more like the IBM of old (focusing on enterprise wide hardware systems), will they also deliver lower growth a la IBM. The 1st quarter of this year certainly provides reason for caution.
And the competitive environment has toughened considerably thanks to a revitalised HP, a bulked up Lenovo and Apples Intel computers. Dell needs to continue to focus on moving themselves up the food chain and deeper into the worlds leading enterprises. They also need to become your total "Intel hardware of choice" provider around the globe.
If they do that, there should be enough scope for growth in the upcoming years. And if not - they could always think of merging with Motorola. Now that's a thought. The mobile handset business sure has legs to it.
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