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Dell Q3 net up 12 per cent at $983mn

Computer-maker Dell warns that its full-year revenue could be impacted by the uncertain macroeconomic environment and an industry-wide shortage of hard drives.

twitter-logo PTI   New Delhi     Last Updated: November 16, 2011  | 13:09 IST

Computer-maker Dell on Wednesday posted a 12 per cent increase in net income to $983 million for the third quarter, but has warned that its full-year revenue could be impacted by the uncertain macroeconomic environment and an industry-wide shortage of hard drives.

Net income stood at $875 million in the third quarter of 2010.

Revenues of the company, however, remained flat at $15.36 billion in Q3, 2011, compared to $15.39 billion in the same period a year ago.

"Given the uncertain macroeconomic environment and complexity in working through the industry-wide hard drive issue, the company is trending to the lower end of the range of its revenue outlook of 1 to 5 per cent full fiscal-year growth," Dell said in a statement.

There may be a slowdown in PC manufacturing through 2012 after flooding in Thailand severely disrupted production of hard drives, which is a key component in computers.

Dell also lost market share during the third quarter to Asian rival Lenovo Group, which claimed the No 2 ranking in PCs behind market leader HP, according to research firm Gartner.

Hewlett-Packard was the largest vendor with a 17.7 per cent market share in Q3, while Lenovo moved into the second spot with a 13.5 per cent market share. Dell had an 11.6 per cent share of global PC shipments in Q3.

Internationally, revenue in growth countries - defined as those outside the US, Canada, Western Europe and Japan - grew by 11 per cent in the reporting quarter and accounted for 29 per cent of Dell's revenue.

The Asia-Pacific and Japan saw revenue growth at 10 per cent, led by 23 per cent growth in China and a 13 per cent increase in Australia/New Zealand. Revenue in BRIC countries increased by 14 per cent.

Furthermore, EMEA revenue increased by 4 per cent.

Revenue in European growth countries increased by 12 per cent, led by the Czech Republic, Poland and Russia.

Cash flow from operations amounted to $851 million during the quarter and $5.2 billion over the last four quarters.

Dell ended the quarter with $16 billion in cash and investments and repurchased $600 million in stock in the quarter.

During the year, Dell has spent $2.18 billion to purchase 142 million shares of Dell stock.

"Our results this quarter and over the past year reflect a new Dell, one focused on providing our customers productivity-enhancing solutions either developed organically or acquired," Dell Chairman and CEO Michael Dell said.

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