Dell's Profit Ebbs in the First Quarter
Dell reported a drop in profits for the first quarter, weighed down by a revenue decrease and slower sales of consumer products.
Dell reported net income of $535 million, down 33 percent from the same quarter last year. Excluding one-time charges, it reported net income of US$761 million for the quarter that ended on May 4, down 28 percent compared to last year's first quarter. Earnings per share was $0.43, compared to the consensus estimate of $0.46 from analysts polled by Thomson Reuters.
Dell's revenue was $14.4 billion, dropping by 4 percent year over year, while analysts expected revenue of $15 billion.
Revenue for Dell's consumer division, which deals in PCs, tablets and other products, was $3 billion, declining 12 percent year-over-year. Revenue for the Large Enterprise unit, which deals in software, services and hardware for large companies, was $4.4 billion in the quarter, a 3 percent decline. A bright spot was Dell's Small and Medium Business business unit, which grew revenue by 4 percent to $3.5 billion.
Revenue for mobile products such as laptops and tablets fell by 10 percent, while desktop revenue fell by 1 percent. Dell was the third largest PC maker in the first calendar quarter of the year behind Hewlett-Packard and Lenovo, according to IDC. While worldwide PC shipments grew by just 2.3 percent, Dell's shipments fell by 2.1 percent year-over-year during the calendar quarter, IDC said.