Print 6 comment(s) - last by TakinYourPoint.. on May 20 at 2:39 AM

Dell misses Wall Street estimates

As the battle rages at Dell Computer to see which faction comes out on top in a number of buyout proposals, profits at the company are on the decline.

Reuters reports that Dell recorded a 79% decline in profits as the PC market continues to shrink. One of the goals of Michael Dell in his attempted buyout of the company is to transform Dell Computer from a computer maker to an enterprise computing services company. Michael Dell and his backers believe that the transformation is best done out of the public eye.

It seems that the this transformation is a relatively good plan as one of the few bright points in Dell's recent financial statements was revenue in the enterprise solutions and services segment increasing 12% to $5.5 billion. Overall revenue slid 2% and PC sales declined by 9%.

"Hardware margins were pretty abysmal, which should generally support (Michael) Dell's bid," said Morningstar analyst Carr Lanphier. "But Michael Dell's strategy is also to be aggressive in pricing, to win key contracts."

Net income at Dell decreased to $130 million from $635 million compared to the same quarter of 2012.

Source: Reuters

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Just like Best Buy
By inperfectdarkness on 5/17/2013 3:14:00 PM , Rating: 1
Going down in flames. And you won't be missed.

RE: Just like Best Buy
By TheSlamma on 5/17/2013 4:25:31 PM , Rating: 2
Cause yeah we got Lenovo and HP now LOL *cry*

RE: Just like Best Buy
By inperfectdarkness on 5/18/2013 2:36:04 PM , Rating: 2
Consumer demand for quality will create a supply for it. If that means a change in business practice for existing companies--or an upstart to fill the need--either way, it will happen.

On the server-end, I really don't care. There will always be a profit to be had when there's that kind of volume. I'm primarily concerned with what affects me on a personal level; home computers. As far as I'm concerned, there's enough brands out there to more than fill the "vacuum" left behind by a Dell exit.

People complained that GM shouldn't have been allowed to fail either. Fact is, GM failing wouldn't have affected car sales in the slightest. GM's market share would be gobbled up by Honda, Toyota, Nissan, VW, Hyundai and everyone else. The market will correct itself.

RE: Just like Best Buy
By Belard on 5/17/2013 8:43:56 PM , Rating: 1
Yeah... Unlike the Amiga, when it died (with Commodore) - we lost a computer that had personality.

When Dell goes.... who really cares? Other than it leaves HP and Lenovo for servers... and perhaps the return of mom-pop PC stores?

Selling PCs are dirt cheap prices has always been stupid.
Around 1990, a typical Clone PC was about $3000. As a PC builder, your margin is 30% so profit = $900. Sell a bunch of those and your able to build a large business (Dell) who was smart enough to run it like professional company.

I remember around 2000 when Mr. Dell said "we will never make a $500 PC" - because the margins were too small. With the likes of eMachines and some others selling $500 computers... Dell eventually joined the crowd.

There was a time when Apple, Commodore, IBM and even Dell built their computers in the USA.

RE: Just like Best Buy
By Donkey2008 on 5/18/2013 1:58:13 PM , Rating: 2
Amiga? Wow, that brings back great memories from childhood. Local mom-and-pop shops were everywhere and you could play with a Ti99, Apple II, Commodore64, Timex Sinclair (I actually bought one with my allowance, lol), Atari 2600, Colecovision, Intellivision, Odyssey 2, etc all in one place.

Now it's the Apple store where you have to stand next to wannabe yuppy types who are drinking Starbucks and talking about how awesome Apple is. Or standing in line at the grocery store listening to some nerd talking about how awesome his Droid is and how Apple sucks completely.

Back in the day EVERYTHING was cool and there was not nearly the cynicism of today.

RE: Just like Best Buy
By TakinYourPoints on 5/20/2013 2:39:07 AM , Rating: 2
Racing to the bottom killed all these companies. An 80% drop in profit is brutal.

If Michael Dell manages to take the company private, count on him pulling an IBM and selling or discontinuing the consumer division and just focusing on enterprise, a place where profit margins still exist.

"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins
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