Dell Reports Strong Second Quarter Financial Results Driven by

Dell Reports Strong Second Quarter Financial Results Driven by Enterprise Solutions and Services


DELL INC.
Condensed Consolidated Statement of Income and Related Financial Highlights
(in millions, except per share data and percentages)
(unaudited)

	Six Months Ended						% Growth Rates
	July 29,			July 30,
		2011			2010		Yr. to Yr.

Net revenue
Products	$	24,669		$	24,731		(0	%)
Services, including software related		6,006			5,677		6	%
Net revenue		30,675			30,408		1	%

Cost of net revenue
Products		19,371			21,316		(9	%)
Services, including software related		4,347			3,990		9	%
Total cost of net revenue		23,718			25,306		(6	%)

Gross margin		6,957			5,102		36	%

Selling, general and administrative		4,199			3,509		20	%
Research, development and engineering		400			329		22	%
Total operating expenses		4,599			3,838		20	%

Operating income		2,358			1,264		87	%

Interest and other, net		(97	)		(117	)	17	%
Income before income taxes		2,261			1,147		97	%
Income tax provision		426			261		63	%
Net income	$	1,835		$	886		107	%

Earnings per share:
Basic	$	0.97		$	0.45		116	%
Diluted	$	0.97		$	0.45		116	%

Weighted average shares outstanding:
Basic		1,883			1,956		(4	%)
Diluted		1,897			1,967		(4	%)

Percentage of Total Net Revenue:
Gross margin		22.7	%		16.8	%
Selling, general and administrative		13.7	%		11.5	%
Research and development		1.3	%		1.1	%
Operating expenses		15.0	%		12.6	%
Operating income		7.7	%		4.2	%
Income before income taxes		7.4	%		3.8	%
Net income		6.0	%		2.9	%
Income tax rate		18.8	%		22.8	%

Net Revenue by Product Category:
Servers and Networking	$	4,027		$	3,675		10	%
Storage		983			1,178		(17	%)
Services		4,020			3,806		6	%
Software and Peripherals		5,136			5,031		2	%
Mobility		9,477			9,263		2	%
Desktop PCs		7,032			7,455		(6	%)
Consolidated net revenue	$	30,675		$	30,408		1	%

Percentage of Total Net Revenue:
Servers and Networking		13	%		12	%
Storage		3	%		4	%
Services		13	%		12	%
Software and Peripherals		17	%		17	%
Mobility		31	%		30	%
Desktop PCs		23	%		25	%

Net Revenue by Global Segment:
Large Enterprise	$	9,061		$	8,795		3	%
Public		8,224			8,436		(3	%)
Small and Medium Business		7,477			7,059		6	%
Consumer		5,913			6,118		(3	%)
Consolidated net revenue	$	30,675		$	30,408		1	%

Percentage of Total Net Revenue:
Large Enterprise		30	%		29	%
Public		27	%		28	%
Small and Medium Business		24	%		23	%
Consumer		19	%		20	%

Consolidated Operating Income:
Large Enterprise	$	952		$	571
Public		854			667
Small and Medium Business		867			636
Consumer		209			(4	)
Segment operating income		2,882			1,870
Severance and facility actions		(19	)		(81	)
Broad based long-term incentives		(178	)		(174	)
Amortization of intangible assets		(187	)		(175	)
Acquisition-related		(140	)		(36	)
Other ⁽¹⁾		-			(140	)
Consolidated operating income	$	2,358		$	1,264


Note: Percentage growth rates and ratios are calculated based on underlying data in thousands.

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