Dell profit sinks as rival HP grabs market share
Dell Inc. reported a sharply lower quarterly profit Thursday while revenue fell short of Wall Street expectations.
Dell sees pressure on growth and profit margins in the next several quarters as it spends money to revamp its business, and Chief Executive Michael Dell called the latest results “disappointing.”
The company lost market share to Hewlett-Packard Co. in the fourth quarter, and in January founder Michael Dell replaced Kevin Rollins as CEO after a string of disappointing earnings reports, slowing growth and complaints about poor customer service.
It lags behind HP in the fast-growing markets for notebook computers, consumer PCs and printers.
Net income for Dell’s fiscal fourth quarter, which ended Feb. 2, was $673 million, or 30 cents a share, and revenue was $14.4 billion. Dell a year ago reported net income of $1.01 billion, or 43 cents a share, and revenue of $15.2 billion, though those figures are subject to restatement because of pending reviews of Dell’s past accounting.
Excluding a 6-cent gain due to Dell not paying bonuses, and adding items including a 1-cent gain from the sale of real estate, Dell earned 26 cents a share, according to Reuters Estimates. Wall Street was expecting 28 cents on revenue of $14.7 billion.
Dell described Thursday’s report as preliminary because it was reviewing its accounting and might restate results. The company said last year that the Securities and Exchange Commission and federal prosecutors were investigating its accounting.
Shares of Round Rock, Texas-based Dell fell to $22.54 in extended trading after the earnings report, after closing up 16 cents at $23.01.