Dell Q2 profit slides down 72%
16 Aug 2013
Dell is still fighting a declining PC market and an uncertain future to improve its financial performance.
On Thursday it reported revenues of $14.5 billion for the second quarter ended August 2013, almost in line with the same quarter last year. The net income, however, declined 72 per cent to $204 million.
''In a challenging environment, we remain committed to our strategy and our customers, and we're encouraged by increasing customer interest in our end-to-end solutions offerings and continued growth in our Enterprise Solutions, Services and Software businesses,'' said Brian Gladden, Dell chief financial officer.
Founder and CEO Michael Dell and a group of discontented shareholders are already in a battle on taking Dell private.
Billionaire investor Carl Icahn has teamed up with major shareholder Southeastern Asset Management against proposed takeover of Dell Inc by Michael Dell and Silver Lake. (See: Icahn files suit against Dell in buyout bid)
It is unclear if the privatisation plan will see sunlight.
Meantime on Tuesday, Icahn, in a Twitter post had said that he has amassed a large position in Apple Inc. (See: Icahn builds up stake in Apple; seeks changes)
Due to weak results and executives' inability to anticipate revenue and earnings, selling the company is the best solution, says Dell's directors.
But Icahn and other investors have said Dell is playing up its financial weaknesses to justify what they say is Michael Dell's cheap offer for the company.
The company's gross margin continued to fall, to 18.5 per cent from 21.6 per cent a year earlier.
Sales in Dell's PC business fell 5 per cent, less severe than the broader decline in that market. While operating income for the division selling PCs and related gear fell 71 per cent, operating expenses fell $72 million from three months earlier.
Cash flow from operations in the quarter was $1.7 billion. Dell ended the quarter with $13.9 billion in cash and investments.
