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Dell quarterly revenues down 8% on poor desktop performance

Market share crashing in fastest-growing zones

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Wall Street analysts were expecting a drop off in Dell's business and they won’t be disappointed, with the company reporting revenues down 8 per cent for the second quarter of the year.

Dell blamed the drop on poor performance in its PC and mobile divisions, saying that its consumer PC lines were down 22 per cent on the year and the small and medium sized business group down 1 per cent. The company faired best in the US, with overall revenues down 6 per cent, compared to 7 per cent in Europe, 12 per cent in Asia and Japan and 15 per cent in the fast-growing BRIC (Brazil, Russia, India, and China) nations.

The enterprise solutions and services division is doing very well, however, with revenues up six per cent. The group now makes up more than 50 per cent of company margin and more than a third of its revenue. Servers and networks saw revenues rise 14 per cent and storage was up 6 per cent.

"Our performance in the second quarter provided another proof-point that our long-term strategy is right," said Brian Gladden, Dell CFO, in a statement. "We continued our progress in shifting the mix of our business to higher-margin enterprise solutions, led by solid growth in our server, networking, services, and Dell IP storage businesses."

The company expects the rate of contraction to slow in its next quarter, predicting revenues would fall around 2-5 per cent in the third quarter of the year.

"We're transforming our business, not for a quarter or a fiscal year, but to deliver differentiated customer value for the long term," said Michael Dell, chairman and CEO. "We're clear on our strategy and we’re building a leading portfolio of solutions to help our customers achieve their goals." ®

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