Dell sees quarterly profits slip

US computer maker Dell has seen its quarterly profits slip 5%, as customers worldwide bought fewer computers.

Dells profits in the third quarter were $727m (£492.3m), down from $766m in the same period last year.

Dell’s chief financial officer, Brian Gladden, said that the firm expected “the challenging environment to continue”.

In one bright spot, Dell’s revenue from its personal computers increased 10%, as global sales jumped 32%.

However, Dell’s consumer sales account for less than a fifth of the company’s total, and the bright performance wasn’t able to offset trouble in the corporate business.

Dell said its sales slipped 3% to about $15bn, which was slightly less than most analysts had been expecting.

In the Americas, Dell’s largest region for sales to businesses, its revenue fell 8%.

"We expect the challenging environment to continue - we’re seeing global implications and slowing in almost all of the businesses we are in"
Brian Gladden
Dell chief financial officer

Dell also lacks the product diversity enjoyed by its biggest rival, Hewlett-Packard, which announced this week that it would exceed analysts’ forecasts for its most recent quarter.

Dell has been on a cost-cutting campaign in a bid to respond to the economic slump and has cut 9% of its work force in the past year.

Mixed views

Mr Gladden said in a conference call that the results were tempered by the worsening economic conditions.

“We expect the challenging environment to continue. We’re seeing global implications, and slowing in almost all of the businesses we are in,” he said.

Analysts’ views of the results were mixed.

“What this shows is that cost-cutting initiatives are beginning to take effect. It shows that best-of-breed companies will be able to still grow through cost-cutting,” said Bill Kreher of Edward Jones.

However, others said Dell was too dependent on a rapidly-slowing US market.

“Clearly, Dell’s stronger presence in the US market has made the environment more difficult compared to competitors who have a stronger presence in emerging markets,” said Charles Smulders, of Gartner

This article is from the BBC News website. © British Broadcasting Corporation