Sunday 21 December 2014

Dell’s third quarter profits slip 47pc

Poornima Gupta

Published 16/11/2012 | 14:13

DELL’S third-quarter profit slid 47pc, hurt by lower PC sales, weaker demand from large corporations and the shift to mobile computing.

Dell's consumer PC business is struggling as more and more consumers are using smartphones and tablets to do basic computing, and the company's corporate customers continue to defer spending due to the uncertain state of the economy.

The No. 3 personal computer maker warned that it "sees the challenging global macroeconomic environment continuing in the fourth quarter."

The company, once the world's top PC maker and a pioneer in computer supply chain management, is struggling to defend its market share against Asian rivals like Lenovo. It is trying to bolster growth by focusing on products and services to corporations.

The company said it expects revenue to grow as much as 5pc in the current quarter.

"Our outlook for the quarter would be generally consistent with what we typically see in terms of a seasonal pickup," it said.

Dell said revenue in its fiscal third quarter fell 11pc to $13.7bn, slightly lower than the average analyst estimate of $13.89bn according to Thomson Reuters I/B/E/S.

It posted net income of $475m or 27 cents a share in the quarter, compared with $893m or 49 cents a year earlier. Excluding certain items, it earned 39 cents a share, compared to an average forecast for 40 cents.

Chief Financial Officer Brian Gladden said in an interview that corporate customers continue to defer technology spending.

"It's not clear what's going to cause them to increase their spending in the short term, given the uncertainty in the economy," he said.

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