According to the latest news, the Dell Company has reported a 6% fall in quarterly earnings, as low profit margins offset an increase in sales.
The world’s third-largest computer-maker made a net profit of $334m in the three months to 29 January, down from $351m a year ago. Dell saw sales of its personal computers rise 29% during the quarter, but more consumers were choosing to buy its less profitable, cheapest models.
Despite the profit fall, the US group’s results still beat market expectations. Its revenues for the quarter rose 11% to $14.9bn. Dell’s figures come a day after rival Hewlett-Packard reported that its net profit for the same key Christmas-period quarter soared 25% after strong sales.
The big problem for investors and analysts late was how Dell could see revenue grow so much with little change in profits. The company insisted the big problems were price wars and component costs, particularly in the consumer business, where low-cost netbooks and other computers weigh on the market.
Why should the 2011 fiscal year be better? Dell thinks a lot of businesses are struggling to keep existing computer systems and networks going. So, the company sees what it calls a big “refresh” starting. That will be helped by faster machines and the new Windows 7 operating system from Microsoft (MSFT), which publishes MSN Money.
Related posts:
