Dell net profit down 47% y-o-y

Lower PC sales, weaker demand from large corporations and the shift to mobile computing hurt the co's profits

PC manufacturer and IT services and solutions firm Dell saw its third quarter profit fall by 47 per cent due to lower PC sales and softer demand of services among its large clients.

Dell’s third quarter net profit was at $475 million for the quarter ended September 30, 2012 from $893 million in the same quarter last year.

The company said that it continues to see challenging global macro-economic environment in the fourth quarter, which will continue to impact it. Revenue for the quarter was down 11 per cent at $13.7 billion from $15.3 billion in the same quarter last year.

The company saw decline in its consumer revenue as it continued to face stiff competition from players like Lenovo. Consumer revenue was $2.5 billion, a 23 per cent decline, and had a operating loss of $65 million or minus 2.7 per cent of revenue.

Dell also saw its revenue falling across business units and regions. Large enterprises reported a decline of 8 per cent, public revenue decreased 11 per cent, and small and medium enterprises was down 1 per cent.

Revenue from geographies like Americas was down 9 per cent; Asia-Pacific and Japan was down 11 per cent; and EMEA was down 15 per cent.

However its Enterprise Solutions and Services revenue grew 3 per cent year over year to $4.8 billion. The ES&S business is on an annual run-rate approaching $20 billion. Server and networking revenue for the quarter grew 11 per cent. Dell was the only top-3 server provider to have positive unit growth in the quarter.

Brian Gladden, Dell CFO said, “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.”