Dell FY 1Q14 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“Let me take you through the financial results for each segment…Let’s start with the Enterprise Solutions Group or ESG. This business includes servers, networking, storage and ESG-related peripherals. We continue to see strong growth in ESG of 10% and revenue of $3.1 billion and operating income of $136 million or 4.4% of revenue.”

“Our End-User Computing businesses or EUC includes desktops including thin clients, notebooks including tablets, third-party software and client related peripherals. This business delivered revenue of $8.9 billion, down 9%. Operating income of $224 million was down 65% at 2.5% of revenue.”

“Demand has been I would say weaker than we expected as we headed into the year.”

“talking about the EUC business. Look, I think we’re not managing that business for one quarter at a time and I think there is a network effect to the impact of what we do there and the scale of that business and the customer relationships that we gain. We are clearly focused on cost in that business in this environment. We have been focused on gaining and improving the growth of that business and gaining share”

“we have made no changes to the strategy and how we’re running the company as a result of this process. I think that’s clear. And I would say it’s very difficult to quantify what impact the process that we are going to has had on the results of the company”

“I would say [employee] attrition has been about normal course.”

“look I think it’s a good question and it’s one we spent a lot of time debating and talking about – there are multiple dynamics playing out. I think you continue to see a Win 7 on the commercial side of the business. It’s driving a refresh cycle. But at the same time and I would say even recently we’re seeing improved demand on the corporate and SMB markets.

But if you look at consumer, you look at government; you look at federal those have been rather challenged. And it’s some of the things we’ve been talking about over the last few quarters where you have competing devices in some cases. Windows 8 has been from our standpoint, not necessarily the catalyst to drive accelerated growth that we had hoped it would be.

We are encouraged by what’s going to play out with new chip sets and some of the work that is going on within the windows ecosystem to hopefully over the next few months create some catalysts. But you look at the recent external data from any of the third party sources, we would expect to continue to see over the next few quarters year-over-year declines in PC demand”