Dell Inc. (DELL)
Q1 2010 Earnings Call Transcript
May 28, 2009 5:00 p.m. ET

Executives

Lynn A. Tyson - Vice President, Investor Relations
Michael S. Dell - Chairman of the Board & Chief Executive Officer
Brian T. Gladden - Chief Financial Officer & Senior Vice President

Analysts

Richard Gardner - Citigroup
Kathryn Huberty - Morgan Stanley
Toni Sacconaghi - Sanford C. Bernstein & Co.
Benjamin Reitzes - Barclays Capital
Bill Shope - Credit Suisse
Mark Moskowitz – JPMorgan
Maynard Um - UBS
Shannon Cross - Cross Research LLC
David Bailey - Goldman Sachs
Bryan Alexander - Raymond James
Keith Bachman - Bank of Montreal
Scott Craig - Bank of America/Merrill Lynch
Jeffrey Fidacaro – Susquehanna Financial Group
David Wong – Wachovia Capital Markets

Presentation

Operator

Good afternoon and welcome to the Dell Inc. first quarter fiscal year 2010 earnings conference call. I would like to inform all participants this call is being recorded at the request of Dell. This broadcast is the copyrighted property of Dell Inc. Any rebroadcast of this information in whole or part without prior written permission of Dell Inc. is prohibited.

As a reminder, Dell is also simulcasting this presentation with slides at www.dell.com/investor. Later we will conduct a question-and-answer session. If you have a question, simply press “*” then “1” on your telephone keypad at any time during the presentation. I’d like to turn the call over to Ms. Lynn A. Tyson, Vice President of Investor Relations. Ms. Tyson, you may begin.

Lynn A. Tyson

Thank you, Ashley. With me today are Chairman and CEO, Michael Dell, and Senior Vice President and CFO, Brian Gladden. Brian will review our first quarter results and then Michael will follow with his perspective on our strategy.

We just posted information on our IR site at dell.com, including a V-log with Brian on our blog on Dell Shares, as well as our web deck. Please review both of these to get additional perspectives on our results and long-term strategy.

This quarter we finalized the globalization of our commercial business into three business units - large enterprise, public, and small and medium business. Our results this quarter reflect this new structure and so instead of revenue and operating income by region, we are reporting it by customer segment.

We’ve also made other changes to our external reporting, which are outlined in a blog post on Dell Shares dated May 15. I strongly encourage you to read this post to learn more about our new business unit structure, changes we’ve made to our reporting of services and other product categories, and also how we are reporting business unit operating income. The financial statements that accompany this quarter’s earnings release have our fiscal 2009 quarterly results restated for the lines that are impacted by the changes we made this quarter.

Our Investor Relations activities in Q2 will be focused on our annual Analyst Meeting here in Austin, Texas. The event will begin the evening of July 13th with a reception hosted by our full executive leadership team and select business leaders. The meeting on July 14th will feature presentations by Michael, Brian, and each of our business unit general managers.

Finally, I would like to remind you that all growth comparisons made on this call are year over year unless otherwise stated and that all statements made during this call that relate to future results and events are forward-looking statements that are based on our current expectations. Actual results could differ materially from those projected in the forward-looking statements because of a number of risks and uncertainties which are discussed in our annual and quarterly SEC filings, and in the cautionary statement contained in our press release and on our website.

Now I’ll turn it over to Brian.

Brian T. Gladden

Thanks, Lynn. We continued to execute against the key transformation priorities we’ve laid out for you over the past few quarters, delivering great technology, service, and value to our customers, making strong progress towards a leading cost position, and driving disciplined working capital management. We are pleased with our execution on these key activities and remain focused on the continued transformation of the company. We have much more to do.

Consistent with the second half of our last fiscal year, in our first quarter we again delivered stable profitability and improved our liquidity. We’ve also made progress in expanding our portfolio of products and services to better serve our customers. So let’s take a look at the P&L and key performance metrics for the first quarter, which you can find on page six and seven of the web deck.