Dell Earnings Fall Sharply

Dell Inc. (NASDAQ:DELL) announced net income of $475 million, or 27 cents per share, for its third fiscal quarter ended November 2nd. (Much more detailed financial data is available here.) During the same period last year it reported net income of $893 million, or 49 cents a share. Non-GAAP earnings per share for the recently concluded quarter were 39 cents.

For the period in progress, Dell is projecting that the revenue will increase between 2% and 5% over the third quarter. Dell also maintains its full year forecast for adjusted (i.e. non-GAAP) earnings of at least $1.70 per share.

Analysts, however, had expected better numbers for the quarter just ended and in its guidance for the rest of the year, so Dell’s stock price dropped sharply on the news. All of Dell’s reportable business segments (in Dell’s case defined by customer type) experienced sales declines. But Dell reported that revenues from servers and networking (sold across segments) were up 11% over the prior year’s quarter, and revenues from Enterprise Solutions and Services products (also sold across segments) grew 3%.    

Dell, experiencing diminishing sales of desktop PCs and laptops along with the rest of the industry, is endeavoring to shift its emphasis from the sluggish PC market and continuing its move into end-to-end solutions. As part of this, on Friday Dell announced the acquisition of Gale Technologies, a leading provider of infrastructure automation software.




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