The Texan company reported another weak quarter, while its founder is fighting to get the company off the coast.
Dell has announced a drop in profits and revenues for the quarter ended May 3, while its CEO, Michael Dell, continues his fight to get his company to the stock exchange. The benefits of the Texas firm for its latest quarter totaled 130 million U.S. dollars against 635 a year earlier, a decrease of 79%. Revenues from the Austin firm decreased by 2% to 14.07 billion.
Dell's PC division was particularly affected. Sales for the quarter decreased 9% to 8.9 billion$, according to the firm, and the group's operating profit slipped 65% down to only 224 million$. Sales of laptops have been particularly bad.
Windows 8 has not boosted PC sales
Part of the problem is that Windows 8 has failed to boost PC sales. "Windows 8 was not, from our point of view, the need to stimulate growth as we thought it would be the catalyst event," said the CFO of the company, Brian Gladden, during a teleconference discuss the results. He also believes that demand for PCs will continue to decline in the coming quarters. The battle to make private Dell also weighed on results. The Company incurred 90 million$ in spending in the fourth quarter related to this effort, says Gladden.
The Dell business activity showed mixed results. Sales of servers and network equipment increased by 14%, but the storage is down 10%. The services division grew its revenues by 2%. To blow redemptions, the Austin firm strives for several quarters to build a software business activity, which it hopes will eventually generate higher than its PC division profits. The software business recorded an operating loss for the fourth quarter, while Dell continues to invest in the sales force and R & D to complete the integration of its products.
0.21$ per share against 0.35$ expected
Dell earnings for the quarter - on a pro forma basis, which excludes non-recurring items - were 0.21$ per share, well below analysts' forecasts ( 0.35$ per share), according to Thomson Reuters. Revenue was better than expected, however, analysts expected 13.5 billion$.
In a statement, Brian Gladden said that Dell's profits were affected by the measures it has taken to improve its competitiveness. "We will also continue to make significant investments to support our strategy and drive long-term profitability," he said. As in the previous quarter, Michael Dell was not present at the téléprésentation these results, and a Dell spokesman said the other leaders did not take questions about the purchase of Dell.
Michael Dell announced in February that it plans to exit the business of the stock exchange following an agreement with Silver Lake Partners, for an estimated 24.4 billion$. The founder of the company said he wants some leeway to focus on long-term investments without the constant supervision of Wall Street. This plan, however, faced strong opposition from some major shareholders who think the company is worth more than what Michael Dell and its partners have offered to pay. Finally, shareholders will vote on the issue this summer. If a majority of shareholders vote in favor of the plan of Michael Dell to the private sector, the largest investor outside Dell, Southeastern Asset Management, said he could go to court to fight and get a price high.
Dell has announced a drop in profits and revenues for the quarter ended May 3, while its CEO, Michael Dell, continues his fight to get his company to the stock exchange. The benefits of the Texas firm for its latest quarter totaled 130 million U.S. dollars against 635 a year earlier, a decrease of 79%. Revenues from the Austin firm decreased by 2% to 14.07 billion.
Dell's PC division was particularly affected. Sales for the quarter decreased 9% to 8.9 billion$, according to the firm, and the group's operating profit slipped 65% down to only 224 million$. Sales of laptops have been particularly bad.
Windows 8 has not boosted PC sales
Part of the problem is that Windows 8 has failed to boost PC sales. "Windows 8 was not, from our point of view, the need to stimulate growth as we thought it would be the catalyst event," said the CFO of the company, Brian Gladden, during a teleconference discuss the results. He also believes that demand for PCs will continue to decline in the coming quarters. The battle to make private Dell also weighed on results. The Company incurred 90 million$ in spending in the fourth quarter related to this effort, says Gladden.
The Dell business activity showed mixed results. Sales of servers and network equipment increased by 14%, but the storage is down 10%. The services division grew its revenues by 2%. To blow redemptions, the Austin firm strives for several quarters to build a software business activity, which it hopes will eventually generate higher than its PC division profits. The software business recorded an operating loss for the fourth quarter, while Dell continues to invest in the sales force and R & D to complete the integration of its products.
0.21$ per share against 0.35$ expected
Dell earnings for the quarter - on a pro forma basis, which excludes non-recurring items - were 0.21$ per share, well below analysts' forecasts ( 0.35$ per share), according to Thomson Reuters. Revenue was better than expected, however, analysts expected 13.5 billion$.
In a statement, Brian Gladden said that Dell's profits were affected by the measures it has taken to improve its competitiveness. "We will also continue to make significant investments to support our strategy and drive long-term profitability," he said. As in the previous quarter, Michael Dell was not present at the téléprésentation these results, and a Dell spokesman said the other leaders did not take questions about the purchase of Dell.
Michael Dell announced in February that it plans to exit the business of the stock exchange following an agreement with Silver Lake Partners, for an estimated 24.4 billion$. The founder of the company said he wants some leeway to focus on long-term investments without the constant supervision of Wall Street. This plan, however, faced strong opposition from some major shareholders who think the company is worth more than what Michael Dell and its partners have offered to pay. Finally, shareholders will vote on the issue this summer. If a majority of shareholders vote in favor of the plan of Michael Dell to the private sector, the largest investor outside Dell, Southeastern Asset Management, said he could go to court to fight and get a price high.
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