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Friday, August 16, 2013

Daily Report: Profit Tumbles at Dell as PC Sales Slow

Dell, once a major player in the PC market, missed the industrywide shift toward smartphones and tablets, and the company’s financial earnings report on Thursday reflected that mistake, Brian X. Chen reports.

Dell reported net income of $204 million for its fiscal second quarter, down 72 percent from the same quarter a year ago. Revenue was $14.5 billion, about flat from the same period a year ago, but better than the $14.18 billion that Wall Street had expected, according to a survey of analysts by Thomson Reuters.

On an adjusted basis, excluding certain costs, charges and other items, Dell’s net income was 25 cents a share, a penny better than expectations, according to Thomson Reuters.

“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,” Brian Gladden, Dell’s chief financial officer, said in a statement.

Dell’s shrinking income mirrors slowing sales of personal computers at a time when many people are buying tablets instead. To keep its momentum going, Dell cut prices for many of its products but sacrificed profit margins.

The company’s revenue for its end-user computing business, which includes personal computers, accessories and third-party software, was $9.1 billion, down 5 percent from the year-earlier period.