Original URL: https://www.theregister.com/2006/11/21/dell_q3_pre/

Dell's PC sales keep falling in Q3

But only on a preliminary basis

By Ashlee Vance

Posted in Channel, 21st November 2006 22:19 GMT

After pulling all-nighters over the weekend, Dell's crack team of accounting nerds managed to finish off the company's third quarter results - well, almost.

Dell today dished out "preliminary" third quarter results that showed revenue rising to $14.4bn from $13.9bn in the same period last year. The hardware maker's net income also rose year-on-year to $677m from $606m. Both net income figures remain well off Dell's 2004 Q3 total of $846m.

Of course, all these results are "preliminary" because Dell is still trying to deal with a pair of accounting probes from the US Securities and Exchange Commission (SEC) and the Southern District of New York.

Dell was meant to file its third quarter results last week but delayed the procedure until today, as it grapples with the accounting probes. The company has yet to file its Form 10-Q for the second quarter with the SEC and "does not expect to timely file" the same form for Q3, according to a SEC filing.

The hardware maker continues to keep the nature of the accounting probes a secret.

In an SEC filing issued today, Dell would only say, "The investigations are examining certain accounting and financial reporting matters, including issues relating to reserves and other balance sheet items that may affect the company's previously reported financial results . . . The investigations are ongoing, and no determination has been made as to whether restatements of prior period financial statements will be required."

In its Q3 statement, Dell declined to provide the customary year-on-year compares across its product lines, but we've done the hard work for you.

PC sales dropped significantly to $4.7bn from $5.1bn last year. Dell's PC business has been a sore spot in recent quarters, as the company struggles to generate much desktop excitement.

Thankfully, Dell has a strong notebook line, which produced $3.9bn - up from $3.6bn - in revenue.

Server and networking sales rose slightly to $1.5bn from $1.4bn, while storage revenue jumped $100m to $600m.

Services revenue reached $1.4bn - up from $1.2bn last year. And software and peripherals hit $2.3bn - up from $2.1bn last year.

Dell's management declined to offer any "color" on the quarter in the company's statement, and management also decided against holding an earnings conference call with analysts. ®