Dell Q3 net dips 54% despite better India, China sales
Press Trust of India / New Delhi Nov 20, 2009, 16:24 IST
Dell Inc, world's third largest personal computer maker, has reported a massive 54 per cent decline in its profit during the third quarter ended October 30, despite seeing an upswing in sales from emerging markers like India and China.
Dell's net profit for the three months to October 30, 2009 was $337 million, down from $727 million in the same quarter last year, the company said Thursday. Revenue also declined by 15 per cent to $12.9 billion compared to $15.2 billion in the same period last year, it added.
Analysts were expecting better results as almost all its peers posted better than expected Q3 results. The Texas-based company's shares fell six per cent following the results on Nasdaq in pre-market trade but closed the day down by 1.18 per cent to $15.87 on Thursday. The company also saw a decline in gross margin that disturbed the market.
Combined sales from China, India, Brazil and Russia were up 18 per cent sequentially and 5 per cent over the past year. In India, sales increased by 17 per cent during the reporting period. "Asia-Pacific is the strongest region. Almost all Asia-Pacific countries have better than average growth, with the exception of Japan. Asia would continue to drive much of the company's growth in the near future," Dell president for small and medium business Steve Felice said.
Dell said that its core business of selling computers to enterprises is returning, after a sharp drop during the global downturn. However, Dell has been feeling the downturn longer than most companies, largely because corporations that account for 80 per cent of its revenues were among the first to cut back their budgets. Consumer business forms only 20 per cent of the overall business of the company.
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