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Dell earnings decline as company prepares for buyout news
20 February 2013

Dell Inc, the personal-computer maker which plans to go private in a $24.4 billion deal, reported sales and profit that beat estimates of analysts. Revenue was down 11 per cent to $14.3 billion in the fiscal fourth-quarter that ended in January. Earnings excluding certain items fell to 40 cents a share, as against analysts' 39-cent estimate.

The results that came in yesterday point to chief executive officer Michael Dell having made headway in his campaign for the transformation of the company into a provider of a broad range of business-technology products.

The PC maker's earlier struggle to gain share in mobile devices as also a late entry into cloud computing contributed to a 31 per cent fall in its stock in 2012, prompting Dell to seek a buyout.

According to analysts, the strength in the enterprise business showed the company's focus on that business was working. They add, the company's focus was on the high-margin businesses, which was showing up in the results.

Robust demand for Dell's networking gear and servers, that run websites and corporate networks, offset weakness in other divisions, with server and networking sales rising 18 per cent to $2.62 billion last quarter. This partly offset a 14 per cent decrease in desktop PCs and a 25 per cent decline in the company's mobility division, including laptop computers.

Dell reported a 31-percent drop in profit, as the company took a hit from shrinking consumer business, though results were better than analysts' expectations. This comes only a week after founder Michael Dell offering to take the company private.

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Dell earnings decline as company prepares for buyout