Dell News on Ulitzer

Dell's fiscal Q3 profits plunged 54% to $337 million, or 17 cents a share, on revenues of $12.9 billion down 15%, but the company says demand is improving and, if looked at sequentially, revenues were up 1%. Wall Street expected it to show up with at least $13.2 in revenues.

HP, by contrast, pre-announced its quarter last week flaunting profits that exceeded all expectations and raising its 2010 forecast.

Dell's forecasting a stronger second half but puts no numbers by that projection. It thinks its Q2, which ended in July, was the bottom. It said October was its best month so far, with November currently looking better.

Michael Dell said, "We're already seeing more client activity in the last 30-60 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 said Windows 7 was being well received and expects seasonal improvements in the consumer sector.

Still in Q3, which ended in October, the company's desktop PC revenue dropped 26% year-over-year while mobility was down 14%, servers 6% and storage 19%.

Shipments to both the large enterprise and SMB customers were up sequentially though shipments overall were flat sequentially and down 5% year-over-year.

The company's overall operating expenses declined to 12.8% of revenue, or $1.7 billion, as a result of cost cutting; cash flow from operations was $801 million; its gross margin was 17.3%.

Dell described its enterprise server and storage revenue as up a combined 5%, with EqualLogic sales showing year-over-year strength.

Sales in China, India, Brazil and Russia combined were up 18% sequentially and 5% over last year. In China, Dell's second-largest country in terms of revenue, sales increased 20% sequentially and 8% year-over-year.

Dell said large enterprise revenue was $3.4 billion, up 4% sequential, down 23% from a year ago, enough to scratch out an operating income of $174 million.

Public spending was good for $3.7 billion in revenue, down 3% sequentially and off 7% from a year ago. Operating income was $352 million. Shipments dropped 12% sequentially, which Dell ascribed to seasonality.

SMB revenue was $3 billion, up 5% sequentially and down 19% year-over-year. Shipments were up 9% sequentially and operating income was $282 million, 15% higher than in Q2, which Dell said was due to steadily improving demand in both the Americas and Asia-Pacific and better performance in EMEA.

Consumer revenue was $2.8 billion, flat from Q2 and down 10% year-over-year ago though shipments were up 4% sequentially and 17% over last year. The unit only managed to squeak out an operating income of $10 million. Obviously the competition is rough.

Dell's getting 47% of its revenues from outside the U.S. It's got $14 billion in the bank.