Feeds

Dell profits sink 17% as revenues rise

Bad Day at Round Rock

Top three mobile application threats

Dell posted a surprise 17 per cent drop in profits for its fiscal second quarter, even though its revenues handily beat Wall Street estimates.

Round Rock said the earnings squeeze was a result of technology spending slowdowns and its expansion into Europe and Asia.

Net income was $616m in the quarter, down 17 per cent from a profit of $746m in the same period last year. Revenue grew 11 per cent to $16.43bn from $14.77bn year-over-year. Analysts were expecting sales of about $15.95bn.

"Strategic actions to accelerate growth in certain areas of our business affected gross margins this quarter," said Dell's CFO, Brian Gladden. Gross margins were 17.2 per cent in Q2, down almost 20 per cent from a year ago.

Dell also warned it sees "continued conservatism" for IT spending in the US, which is spreading to Western Europe and Asia.

Revenues increased year-over-year in every segment except desktops, which was essentially flat. Laptops earned Dell $4.87bn, up 26 per cent from last year. Server revenue was up 5 per cent to $1.7bn. Storage grew 11 per cent, earning $681m. Service revenue was up 14 per cent to 1.46bn. Desktop PC revenue was down 2 per cent to $4.93bn.

Dell said it's on course to reduce costs by $3bn annually by fiscal 2011. Dell reduced its headcount by 8,500 people since Q1, not counting the employees who joined from acquisitions. It also consolidated company-owned sites in the US and Canada.

But for the near future, the hardware vendor still expects its bottom line to be hit by the costs of restructuring to improve profitability.

The profit drop seems to have unsettled investors. As of this publication, Dell shares are down nearly 10 per cent in after-hours trading. ®

3 Big data security analytics techniques

Whitepapers

Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.