Dell profit slides 47 per cent amid weak PC market

Sales of desktop PCs and laptops both declined in the quarter

Courtesy of Dell Inc

Courtesy of Dell Inc

Credit: Dell

Dell on Thursday reported a sharp drop in revenue and profits for the third quarter as the weak PC market continued to weigh on its results.

Dell's revenue for the quarter, ended Nov. 2, was US$13.7 billion, down 11 percent from a year earlier and shy of the $13.9 billion financial analysts had been expecting, according to a poll by Thompson Reuters.

Net income was $475 million, or $0.27 per share, down from $893 million, or $0.49 per share, a year earlier, Dell said.

The Texas firm still gets roughly half its revenue from PCs, so declines in that market hurt the company. Worldwide PC shipments declined 8 percent in the third quarter, as a result of a weak economy and a move toward smartphones and tablets for more computing tasks, Gartner said last month.

The slowdown has also hit Intel, which last month also reported a drop in revenue and profit for its third quarter.

Dell is trying to boost its profits by selling more high-end PCs, rather than cheaper models. But a recent report from IHS iSuppli said consumers are favoring low-end systems, and that high-performance PCs will account for only 6 percent of the market this year.

Dell's revenue from desktop PCs declined 8 percent in the period just ended, to $3.1 billion, while sales of "mobility products" -- including laptops -- fell 26 percent to $3.5 billion, the company said.

Sales of storage equipment, services and software also declined. A bright spot was Dell's server and networking business, where combined sales were up 11 percent, CFO Brian Gladden said in a statement.

"We're also encouraged by early interest in our new Windows 8 touch portfolio and the opportunities it creates for our commercial and consumer businesses," he said.

Before the results came out, Dell's shares closed at $9.58 Thursday, level with the previous day's close. That was down from a 52-week high of $18.36 per share earlier in the year.

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags business issuesserversDellfinancial resultshardware systemsdesktop pcsWindows desktops

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

James Niccolai

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?