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Dell profits slide

November 16, 2012

Once the biggest PC-maker, the US company Dell has seen its profits nearly halve in the last quarter and lost market share to Asian competitors. But the biggest squeeze comes from rival technologies.

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Woman lying on grass with digital tablet © Edyta Pawlowska
Image: Edyta Pawlowska/Fotolia

Between July and September, Dell's net profit fell to $475 million (372 million euros) from $893 million in the same period a year earlier, according to figures released by the Texas-based computer-maker late on Thursday.

Revenues dipped 11 percent, to $13.7 billion, as sales of personal computers dropped 26 percent, in addition to 8 percent lower sales of notebooks. Dell has been hurt by a mounting consumer preference for tablets and smartphones, which has weakened demand for the company's traditional computing hardware.

Dell's business with server and networking solutions, however, expanded by 11 percent in what the company's chief financial officer, Brian Gladden, described as the first positive result in a strategic shift towards more enterprise solutions.

Gladden said he hoped the launch of Microsoft's new Windows 8 operating system would improve demand in the consumer market, but added that uncertainty about the economy might prevent consumers from increasing their spending.

Despite the "challenging environment," Gladden said he expects groupwide revenues to rise by as much as 5 percent in the last three months of the year.

According to the latest data released by the technology market tracker IDC, the company, once the biggest maker of PCs, has fallen to third place, overtaken in sales by US rival Hewlett-Packard and world leader Lenovo from China.

uhe/mkg (dpa, AFP)