After the bell yesterday, Dell Inc. (NASDAQ:DELL) announced its second quarter 2013 results for the period ended August 3, 2012. The company, as expected, reported lower sales and earnings. In spite of expectations, DELL dropped 4.5% in after-hours trading. The personal computer market has been, and is expected to continue to be, weak – and expectations for the overall economy are uncertain.
Reported revenues dropped 8% and earnings fell 18%. The Company also revised its full-year earnings forecast downward.
Dell, named after its founder Michael Dell, has been a leader in the PC business for decades. It also sells a variety of products and services including servers, software, data storage devices, peripherals and even tablets and mobile devices. For those of us who have been around for awhile, Dell has been, and still is, a great vendor.
But it’s actually smartphones and tablets that have been hurting the PC business and by extension Dell, which still depends heavily on PC sales. The company has been trying to shift its business towards larger enterprise customers and higher profit products and services. In its press release Dell’s CFO, Brian Gladden was quoted as saying “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.”
In its press release, the company also said “Dell expects continued solid growth in Enterprise Solutions, Services and Software and also a challenging end-user computer environment in the second half of the year. Given the uncertain economic environment, competitive dynamics and soft Consumer business, Dell expects third-quarter revenue to be down 2-5 percent from second-quarter levels.”