The drop is not welcome news for Dell, which is still in the process of an internal makeover lead by founder and chief executive Michael Dell that has included the company's first forays into retail outlets.
The company pinned much of the blame for the sagging numbers on its rebuilding operation. Efforts to expand the business in Europe, the Middle East and Africa as well as new global consumer programs were credited for the drop in profits.
The company also took a US$52m hit from acquisition and realignment costs.
"We are positioning Dell to win in a new era of global IT spending,” said Michael Dell.
"Our growth at a multiple of the industry across all major product categories for the second consecutive quarter affirms we are on track with our five key business priorities, notebooks, consumer, enterprise, SMB and emerging countries."
Wall Street, however, did not share Dell's optimism. The company failed to meet analyst estimates and shares fell by more than 12 per cent as a result.