rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Dell reports 47% decline in profit in Aug-Oct

Dell reports 47% decline in profit in Aug-Oct

November 16, 2012 13:26 IST

DellDell on Friday reported 47 per cent drop in net profit to $475 million for the August-October quarter of this fiscal, mainly on lower PC sales and weak demand from large enterprises.

The company had posted a net profit of $893 million in the corresponding period last year.

Dell follows February-January fiscal year, which ends on the last Friday of the month.

The company's revenues also dropped by 11 per cent to $13.72 billion in the third quarter of FY13 from $15.36 billion in the year-ago period, Dell said in a statement.

Its revenues were down by 5.24 per cent sequentially as the same stood at $14.48 billion in second quarter of FY13.

Dell had guided third-quarter revenues to be down 2-5 per cent from second-quarter levels on account of uncertain economic environment, competitive dynamics and soft Consumer business.

For the fourth quarter, Dell expects a sequential revenue growth of 2-5 per cent.

"Dell sees the challenging global macro-economic environment continuing in the fourth quarter, which will continue to impact the company's results. The company expects sequential revenue growth of 2 to 5 per cent," it said.

For the full year, Dell maintains its expectation for at least $1.70 in earnings per share on a non-GAAP (Generally Accepted Accounting Principles) basis, it added.

Once the world's top PC maker, Dell is now struggling to defend its market share against rivals like Acer and Lenovo and tablets like Apple's iPad.

Revenue in the US was down nine per cent, while that from Europe, the Middle East and Africa was down 15 per cent.

Revenues from the Asia-Pacific and Japan region, which includes India, were down 11 per cent year-on-year, Dell President, APJ, Amit Midha told reporters on a conference call.

He, however, did not comment on country-specific numbers.

Dell's revenues in Enterprise Solutions and Services business grew three per cent year-on-year to $4.8 billion in the August-October 2012 quarter.

"We are consistently executing our end-to-end solutions strategy for the benefit of our customers.

"In the quarter, we completed the acquisition of Quest Software which -- along with other recent acquisitions like SonicWALL and Wyse -- adds leading management, security, virtualisation and cloud capabilities to our expanding portfolio of powerful solutions," Dell Chairman and CEO Michael Dell said.

The company's server and networking revenues grew 11 per cent.

Revenues from Large Enterprise business was $4.2billion in the quarter, a eight per cent decline, while public revenues saw a 11 per cent fall to $3.8 billion, the company statement said.

Small and medium business revenue was $3.3 billion, a one per cent decline, while consumer revenue was $2.5 billion, a 23 per cent decline, it said.

Cash flow from operations in the reported quarter was $1.3 billion and Dell ended the quarter with $14.2 billion in cash and investments, the company statement said.

"In a difficult global IT spending environment, we saw solid proof points that demonstrate progress in our strategy," Dell CFO Brian Gladden said.

Dell is also encouraged by early interest in its new Windows 8 touch portfolio and the opportunities it creates for the commercial and consumer businesses, he added.

© Copyright 2014 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.