Dell’s Enterprise Solutions Strategy Delivering on Financial Commitments; Company Adopts Quarterly Dividend Beginning in Th...
13 6월 2012 - 5:01AM
Business Wire
Dell has executed on its commitment to grow profitability and
operating income while expanding its enterprise solutions and
services, Michael Dell, chairman and CEO, will tell analysts at the
company’s 2012 Analyst Meeting, which starts today.
“Dell is an end-to-end solutions provider today as we continue
to build out our data center, software and services capabilities,”
Mr. Dell said. “We have changed the conversation we’re having with
our customers. We are a solutions company first, vertically
focused, and creating more value for customers with innovative
offerings that provide competitive advantage.”
In conjunction with the meeting, Dell also announced that its
Board of Directors has adopted a dividend policy under which the
company intends to pay quarterly cash dividends on its common stock
beginning in the third quarter of the current fiscal year. Dell
expects the initial dividend rate to be $0.32 per share per year,
or $0.08 per share quarterly. Based on Monday’s closing price of
$11.86 for Dell stock, the dividend yield would be 2.7 percent.
“Our efforts to streamline our operations and shift the mix of
our business over the past several years have resulted in
sustainably strong cash flow from operations, enabling us to
increase the percentage of capital we’ve allocated to research and
development, capital expenditures and acquisitions while
maintaining an ongoing share repurchase program,” said Brian
Gladden, Dell chief financial officer. “The payment of a quarterly
cash dividend to Dell’s shareholders adds another element to our
disciplined capital allocation strategy.”
The company expects that through the dividend and share
repurchases, it will increase its target range for distribution of
capital to shareholders from 10-30 percent of free cash flow to
20-35 percent. For the past four quarters, Dell has generated $4.9
billion in cash flow from operations and ended its fiscal 2013
first quarter with $17.2 billion in cash and investments.
Mr. Gladden said that Dell is confident in its continuing
ability to make the necessary investments to grow its portfolio of
enterprise solutions and services while initiating the quarterly
dividend and continuing share repurchases.
At the meeting, Mr. Dell and other company executives will
reiterate the company’s intent to continue shifting its mix of
operating income to Dell-owned enterprise solutions and services
that scale vertically and horizontally with customer needs to
address both its largest and smallest customers.
Evidence of Dell’s solutions transition over the past 12 months
includes acquiring eight companies providing strategic intellectual
property for Dell’s growth as a solutions provider, creating a
software organization, and opening 11 customer solution centers
globally. The company also has doubled the number of its engineers
developing enterprise solutions and more than tripled the number of
its specialists selling solutions over the past five years.
The result has been a shift in Dell’s sales to higher-margin
data center solutions consisting of servers, networking, storage
and related software and services. Dell reported in its last fiscal
quarter that 50 percent of the company’s gross margin and more than
30 percent of its revenue came from the sale of enterprise
solutions and services. The company projects its enterprise
solutions, software and services business will grow at a 10 percent
compounded annual growth rate through fiscal year 2016 and
represent an increasing percentage of Dell’s operating income
margin.
Mr. Gladden said that while Dell has become a solutions and
services company, it remains committed to a profitable end-user
computing business.
“By exercising discipline and being selective on the business we
pursue, we expect to continue to run a profitable end-user
business,” Mr. Gladden said. “We’ve gained share in the high-value
portion of the industry for six of the last seven quarters and see
this part of our business continuing to contribute operating income
in excess of 5 percent of revenue.” He also said the company will
continue to address opportunities to take cost out of our
operations and maintain focus on profit rather than unit
growth.
To view the live webcast of the meeting Wednesday starting at
7:30 a.m. CDT, or to view the replay later, go to
www.dell.com/investor.
About Dell
Dell Inc. (NASDAQ: DELL) listens to customers and delivers
innovative technology and services that give them the power to do
more. For more information, visit www.dell.com.
Special Note on Forward-Looking
Statements:
Statements in this press release that relate to future results
and events (including statements about Dell’s plans to pay a
quarterly cash dividend, share repurchases, mix shift expectations,
and enterprise solutions, software and services growth) are
forward-looking statements and are based on Dell's current
expectations. In some cases, you can identify these statements by
such forward-looking words as “anticipate,” “believe,” “could,”
“estimate,” “expect,” “intend,” “confidence,” “may,” “plan,”
“potential,” “should,” “will” and “would,” or similar expressions.
Actual results and events in future periods may differ materially
from those expressed or implied by these forward-looking statements
because of a number of risks, uncertainties and other factors,
including: intense competition; Dell’s reliance on third-party
suppliers for product components, including reliance on several
single-sourced or limited-sourced suppliers; Dell’s ability to
achieve favorable pricing from its vendors; weak global economic
conditions and instability in financial markets; Dell’s ability to
manage effectively the change involved in implementing strategic
initiatives; successful implementation of Dell’s acquisition
strategy; Dell’s cost-efficiency measures; Dell’s ability to
effectively manage periodic product and services transitions;
Dell’s ability to deliver consistent quality products and services;
Dell’s ability to generate substantial non-U.S. net revenue; Dell’s
product, customer, and geographic sales mix, and seasonal sales
trends; the performance of Dell’s sales channel partners; access to
the capital markets by Dell or its customers; weak economic
conditions and additional regulation affecting our financial
services activities; counterparty default; customer terminations of
or pricing changes in services contracts, or Dell’s failure to
perform as it anticipates at the time it enters into services
contracts; loss of government contracts; Dell’s ability to obtain
licenses to intellectual property developed by others on
commercially reasonable and competitive terms; infrastructure
disruptions; cyber-attacks or other data security breaches; Dell’s
ability to hedge effectively its exposure to fluctuations in
foreign currency exchange rates and interest rates; expiration of
tax holidays or favorable tax rate structures, or unfavorable
outcomes in tax audits and other compliance matters; impairment of
portfolio investments; unfavorable results of legal proceedings;
Dell’s ability to attract, retain, and motivate key personnel;
Dell’s ability to maintain strong internal controls; changing
environmental and safety laws; the effect of armed hostilities,
terrorism, natural disasters, and public health issues; and other
risks and uncertainties discussed in Dell’s filings with the
Securities and Exchange Commission, including its Annual Report on
Form 10-K for its fiscal year ended February 3, 2012. The dividend
policy and each dividend will be subject to the Board’s continuing
determination that they are in the best interests of Dell’s
stockholders and are in compliance with applicable law. Dell
assumes no obligation to update its forward-looking statements.
Dell is a trademark of Dell Inc.
Dell disclaims any proprietary interest in the marks and names
of others.
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