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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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