17 per cent year-on-year decline in income

Dell reports disappointing Q2

Computer giant Dell’s Q2 results fell below expectations, sparking a ten per cent drop in share prices.

The firm reported a 17 per cent drop in net income as retail price drops eat in to revenue.

Wall Street had been expecting better performance from the firm in the wake of recent restructuring that saw the company shed jobs and expand its global retail operation.

The company has expanded its product range and pushed them in to the US and EU channels and emerging markets in Asia. These measures saw sales rise by 11 per cent generating $16.4 billion, up from 14.8 billion last year.

However, net profit dropped to $616 million, down from $746 million last year. This drop has been attributed to falling retail prices as Dell operating costs have dropped following the corporate restructuring.

“All their metrics look really good,” said analyst at Pacific Crest, Brent Bracelin. “They’re gaining share and they had their best revenue growth in two years. They’re doing all the right things, except on the gross margin line.”

Link: FT

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