Dell Earnings Down, But Exceed Wall Street Expectation
Dell Earnings Down, But Exceed Wall Street Expectation by UCStrategies Staff
The quarterly earnings from Dell show that the company did better than was expected by Wall Street, but are still down due to the declining PC market. There was a 72 percent drop in net income during Q2, from $732 million in the previous quarter to $204 million. Compared to last year, revenue was flat, coming in at $14.51 billion and exceeding forecasts of $14.18 billion.
The enterprise solutions business was a highlight for Round Rock, Texas-based Dell; it saw an 8 percent rise in revenue to $3.3 billion. The company’s PC division saw a 5 percent decline in revenue to $9.1 billion, there was a 1 percent increase in desktop revenue, and a 10 percent decline in mobility revenue.
Principal analyst at Endpoint Technologies Associates, Roger Kay, said: “These numbers show exactly why Michael Dell wants to take his company private.” Kay added that because Dell’s legacy PC business is in decline with its enterprise solutions business up, the company may need to pay more attention to new business rather than the legacy PC business.
The CFO at Dell, Brian Gladden, stated: “In a challenging environment, we remain committed to our strategy and our customers, and we're encouraged by increasing customer interest in our end-to-end solutions offerings and continued growth in our enterprise solutions, services and software businesses.”
Globally, PC shipments have fallen by 11 percent, according to IDC market research; Dell, therefore, has great challenges ahead. Michael Dell and financial partner Silver Lake are also seeking to take the company private in a $24.4 billion leveraged buyout.
Dell is not able to provide a financial outlook due to its pending buyout deal, and the company has also moved up its earnings report a week. (CY) Link