Dell profit plunges as PC division continues slide

By on
Dell profit plunges as PC division continues slide

Enterprise solutions revenue lifts.

Dell Inc, the subject of a takeover battle between activist investor Carl Icahn and the company's billionaire founder, reported a 79 percent slide in profit as personal computer sales continued to shrink.

Michael Dell and private equity house Silver Lake want to take the world's third-largest PC maker private for US$24.4 billion, arguing its transformation into a provider of enterprise computing services was best conducted away from public market scrutiny.

Reflecting that shift in focus, Dell reported on Thursday that revenue from enterprise solutions, services and software jumped 12 percent to US$5.5 billion, while overall revenue slipped 2 percent. Its "end-user computing division," linked to PC sales, slid 9 percent.

Icahn and major stakeholder Southeastern Asset Management dismiss Michael Dell's go-private deal as too cheap for a company trying to grow into a true rival to the likes of International Business Machines Corp and Hewlett-Packard Co in enterprise computing. They are proposing new leadership and additional cash or stock for shareholders.

Net income fell to US$130 million from US$635 million a year earlier. Excluding certain items, income was down 51 percent to US$372 million, or 21 cents a share, from US$761 million, or 43 cents a share, a year earlier.

That lagged by far the 35 cents Wall Street had expected.

Revenue in its fiscal first quarter ended May 3 fell to $14.1 billion, higher than the average analyst estimate of $13.5 billion according to Thomson Reuters I/B/E/S.

The company said it could not provide a financial outlook because it was in the midst of Michael Dell's go-private deal.

Shares in Dell stayed flat in after-hours trade, at $13.44, after closing at $13.43 on Nasdaq.

Tags:

Most Read Articles

Log In

Username:
Password:
|  Forgot your password?