(This story has been posted on The Wall Street Journal Online's Digits blog.)
Posted By Andrew LaVallee
5:51 pm We're pleased with the Perot acquisition and believe that's a great platform for us, Dell says. Focus going forward will be on smaller targets, so don't be surprised if there are small- and mid-sized acquisitions ahead.
5:43 pm Dell is prioritizing higher-end products where margins are stronger, as opposed to netbooks, which are relatively challenged on that front.
5:38 pm Ben Reitzes at Barclays brings up the Intel/AMD suit, "the elephant in the room," and asks if any changes are resulting.
Gladden says we generally don't comment and aren't even involved in the litigation in this case. But there's no change in the way Dell thinks about component cost related to processors. The issues that've been raised in these proceedings miss an important point -- that the net cost is what matters, he adds.
5:31 pm "We're already seeing more client activity in the last 30 to 60 days than we have in a long time, and the pipeline for client activity going forward into next year is the strongest it's been in a long time," Dell says. 2Q was the bottom, he adds, while 3Q was better, October was the best month to date, and November appears to be even better.
5:27 pm Windows 7 depressed Dell's order rates, particularly in consumer and small business, about two weeks prior to its launch, Gladden says.
5:25 pm Mr. Dell takes over, says he's optimistic about the business opportunities with the Perot merger. He also notes expanded networking partnerships with Brocade and Juniper.
5:20 pm For 4Q, Dell expects an uptick in its consumer business, while public is traditionally seasonally weaker, Gladden says.
5:19 pm Now looking at products, desktop PC revenue declined 26% yoy. Mobility fell 14%, servers down 6%, storage down 19%.
5:17 pm 47% of Dell's revenue was outside the U.S.
5:17 pm A few Perot results: 3Q revenue was $629 million, down 12% from the year-ago quarter. Operating income was $43 million, of 6.8% of revenue.
5:15 pm Small- and medium-sized business revenue was down 19% yoy but up 5% from the prior quarter.
5:14 pm Mixed results in the business units, Gladden says. Large enterprise revenue down 23% yoy. Public revenue down 7%, Dell's best-performing business on a yoy basis, he notes.
5:10 pm Ended the quarter with $14 billion in cash and investments, which decreased by $4 billion on Nov. 3 with the close of the Perot transaction.
5:06 pm Revenue year-over-year comparison is stronger compared with the first half of the year, which saw a greater decline, he says.
5:05 pm "We're encouraged by our third-quarter results," and the company expects sequential growth into the fourth quarter, Gladden says.
5:03 pm Call starts with CEO Michael Dell and Brian Gladden, Dell's finance chief, leading the discussion.
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