By Nathalie Tadena
Dell Inc.'s (DELL) fiscal third-quarter earnings fell 47% as the
computer giant again recorded weaker personal computer sales,
though its server and networking revenue strengthened.
Dell has now posted four straight quarters of profit declines as
the PC market faces growing pressure from tablet computers, intense
price competition and macroeconomic uncertainty.
Dell, one of the world's biggest personal-computer makers,
expects the challenging global macroeconomic environment to
continue in the current quarter. It expects fourth-quarter revenue
growth of 2% to 5% sequentially, which amounts to a range of about
$14 billion to $14.41 billion. Analysts polled by Thomson Reuters
most recently projected revenue of $14.48 billion. The company
affirmed its full-year guidance.
The company in recent years has looked to move beyond its core
personal-computer business and broaden its own portfolio of
products for corporate customers. Dell's turnaround efforts have
prioritized high-margin businesses, such as servers, data storage
and information-technology services, and the company has also made
a number of acquisitions in recent months.
"In a difficult global IT spending environment we saw solid
proof points that demonstrate progress in our strategy," said Chief
Financial Officer Brian Gladden.
In the latest quarter, Dell's revenue from its desktop personal
computer category decreased 8.5%. Servers and networking revenue
jumped 11%. Software and peripherals revenue slid 11%. Revenue from
the mobility-product category, which includes notebook computers
and other mobile devices, declined 26%. Services revenue slipped
0.8%.
For the quarter ended Nov. 2, Dell reported a profit of $475
million, or 27 cents a share, down from profit of $893 million, or
49 cents a share, a year earlier. Excluding acquisition-related
charges and other items, per-share earnings fell to 39 cents from
54 cents.
Analysts polled by Thomson Reuters had projected a per-share
profit of 40 cents.
Revenue totaled $13.72 billion, an 11% decline from a year
earlier and a 5.3% decline sequentially.
Dell's downbeat outlook in August called for revenue to decline
2% to 5% from the second quarter's revenue of $14.48 billion.
Gross margin narrowed to 20.9% from 22.6%.
The public customer segment's revenue was 11% lower, while the
large enterprise customer segment's revenue sank 8.5%. Revenue in
the consumer segment fell 23%, while small and medium business
revenue slipped 1.3%.
Shares were off 1.3% at $9.44 after hours. The stock, which hit
its lowest level in more than three years earlier this month, has
fallen 22% over the past three months.
-Write to Nathalie Tadena at nathalie.tadena@dowjones.com
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