Thu, Aug 23, 2012 - Page 15 News List

Dell says ‘challenging’ PC market is hurting profits

AFP, SAN FRANCISCO

Dell Inc said on Tuesday profits for the second quarter fell as the US tech firm faced a “challenging” PC market and pursued efforts to shift into areas such as software and cloud computing.

Dell said its net income fell 18 percent from a year ago to US$732 million and lowered its outlook for full-year earnings.

Earnings translated to US$0.50 per share excluding special items — above most Wall Street estimates. Revenues dropped eight percent to US$14.5 billion, shy of forecasts.

Still, Dell said it was on track to become a more diversified tech firm, less dependent on personal computers, which are seeing slowing sales as consumers move to various mobile devices.

“We’re transforming our business, not for a quarter or a fiscal year, but to deliver differentiated customer value for the long term,” chairman and chief executive Michael Dell said. “We’re clear on our strategy and we’re building a leading portfolio of solutions to help our customers achieve their goals.”

Chief financial officer Brian Gladden added: “We continued our progress in shifting the mix of our business to higher-margin enterprise solutions, led by solid growth in our server, networking, services, and Dell IP storage businesses.”

“Growth in our PC business was challenging, as we saw a tough macroeconomic and competitive environment, and continued to focus on higher-value solutions in this business,” Gladden said.

Texas-based Dell, once the biggest PC maker, has fallen to fourth place in global sales.

Dell has expanded its effort in the Internet “cloud” in the face of softening demand for traditional computing hardware and has also moved into software and other services.

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