Dell Inc said on Thursday that profits dived 48 percent during the fiscal fourth quarter as the recession forced consumers and businesses to spend less on technology. The company also said it expected to make further cuts to its work force.
Earnings for the quarter that ended Jan. 30 sank to US$351 million, or US$0.18 per share, from US$679 million, or US$0.31 per share, a year earlier. Excluding one-time charges, Dell would have earned US$0.29 per share, just above the US$0.26 per share expected by analysts polled by Thomson Reuters.
But sales missed Wall Street’s US$14.2 billion forecast by some distance, dropping 16 percent to US$13.4 billion from US$16 billion in the same prior-year period.
“We can’t predict how long this slowdown will last,” Dell chief financial officer Brian Gladden warned during a conference call with analysts. “We expect it to be protracted.”
Dell has been working to cut annual costs, and on Thursday Gladden said the company was targeting a US$4 billion reduction by the end of fiscal 2011, US$1 billion more than its previous goal.
Dell is struggling with the same problems it has faced over the last several quarters: over-dependence on the sinking PC market and US sales.
“I think it’s kind of more of the same. Which is better than, ‘It’s going to get a whole lot worse,’ but more of the same is not exactly great,” Shaw Wu, a Kaufman Bros analyst, said of the quarter.
Revenue declined across all of Dell’s product divisions.
Corporations based in the Americas, which make up the biggest slice of Dell’s sales, spent 17 percent less than in the prior year. Sales to companies in the rest of the world also dropped by double digits.
Dell, the second-largest computer maker after Hewlett-Packard Co, said it shipped 18 percent more computers for consumers worldwide in the quarter. But the rising popularity of netbooks — smaller, inexpensive laptops — pushed revenue from consumers down 7 percent.
During the conference call, Dell chief executive Michael Dell brushed off the idea that netbooks were hurting regular consumer laptop sales, or that they might appeal to businesspeople and represent a threat to sales to corporations, too.
But Pacific Crest Securities analyst Andy Hargreaves disagreed, and said in an interview that he believed Dell had to slash the prices of its lower-end laptops because netbooks, which can sell for US$400 or less, make it hard to sell a basic laptop for more.
For the full year, Dell said its profit sank 16 percent to US$2.48 billion, or US$1.25 per share, from US$2.95 billion, or US$1.31 per share, last year.
Revenue was flat at US$61.1 billion.
Analysts had forecast a profit of US$1.32 per share on sales of US$61.8 billion.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary
RSS