Dell Earnings Disappoint as PC Sales, Windows 8 Fail to Save It
November 16, 2012 7:19 PM
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Dell's profit fell 47 percent to 39 cents per share while revenue dropped 11 percent to $13.7 billion
Dell's financial report for the third quarter seems to have missed the targets predicted by Wall Street on many levels due to
sluggish PC sales
For Q3 2012, Dell's profit fell 47 percent to 39 cents per share while revenue dropped 11 percent to $13.7 billion from a year previous (Wall Street expected $13.9 billion). Its net income fell from $893 million (49 cents per share) in Q3 2011 to $475 million (27 cents per share) in Q3 2012.
A large reason for Dell's financial tumble is the lack of demand for PC upgrades. Dell's PC shipments fell 8.3 percent in Q3 2012 from a year earlier.
“In a difficult global IT spending environment we saw solid proof points that demonstrate progress in our strategy,” said Brian Gladden, Dell CFO. “A highlight has been the strong progress of our newly introduced servers, with our server and networking business up 11 percent. We’re also encouraged by early interest in our new Windows 8 touch portfolio and the opportunities it creates for our commercial and consumer businesses.”
, Dell predicts a fourth quarter revenue of $14 billion to $14.4 billion, which is a bit less than the $14.5 billion analysts were shooting for. In Q4 2011, revenue was $16 billion.
In response to all of this disappointing news, Dell stock dropped to $8.81 this morning, which is the lowest its been since March 12, 2009.
While Dell is
looking to Windows 8 for some kind of revival
, the new operating system hasn't provided any immediate boost for PC makers. In fact, Gladden said Windows 8 wouldn't affect Dell's financial results for the next two quarters.
"The client business continues to be challenging," said Gladden. "Commercial customers tend to be lagging adopters of a new operating system. They're going to wait."
To make matters worse, Microsoft doesn't solely depend on PC makers for hardware anymore. Last month, it released its first tablet hardware,
, which features the RT version of the Windows 8 mobile OS. Next year, Microsoft plans to release the Surface Pro, which will run Windows 8 Pro.
This article is over a month old, voting and posting comments is disabled
11/17/2012 5:59:39 AM
Have to say I think a big part of the problem is tablets. why would you buy a desktop at $1000+ when you can buy a tablet for the same or less?
yes a desktop is more versatile but to my mum etc, who cares.
and Windows 8 is never gonna be a savior since I don't see most businesses deploying it, which leaves the consumer market....which is moving to tablets. if Dell could release a 'pro' tablet that could dual boot Windows pro and Android then they could be on a winner.
RE: Tablet pricing
11/17/2012 1:09:02 PM
As a business we are updating to Windows 8 as we have a site licence.
As for tablets... There's zero way that Android in any flavour is touching the internal network.. ever. (Bluestacks!)
The real question: Where is the Dell Latitude 10?
RE: Tablet pricing
11/18/2012 6:45:27 PM
your company is upgrading to win8? can I ask who you work for so as to avoid them like the plague?
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