Dell’s “latest financial results show that the company still has a long way to go to restore its once golden image on Wall Street,” The Associated Press reports.
“Dell, the world’s No. 2 PC maker, promises an aggressive cost-cutting campaign — that means more layoffs on top of the 3,200 jobs already eliminated in the past year — to boost profits,” AP reports. “And it is counting on growth in emerging markets to offset softness in the United States, where customers such as financial-services firms are reining in spending on technology.”
“The company said Thursday that its fourth-quarter profit dropped 6.4 percent, to $679 million or 31 cents per share, in the quarter ended Feb. 1. That included several one-time expenses totaling 7 cents per share and gains of 4 cents per share. Analysts surveyed by Thomson Financial had predicted a profit of 36 cents per share. A year ago, Round Rock, Texas-based Dell earned $726 million, or 32 cents per share,” AP reports. “Sales rose 10.5 percent to $15.99 billion, but that was below the $16.27 billion that analysts had expected.”
MacDailyNews Take: $15.99 billion in revenue is an awful lot of effort to generate just $679 million in profit. By comparison, last quarter Apple generated profit of $1.58 billion on revenue of $9.6 billion (See: Apple beats Street; reports best quarterly revenue and earnings in company history – January 22, 2008). To put it plainly, Dell’s margins suck.
AP continues, “Shaw Wu, an analyst with American Technology Research, said it was “disappointing” that Dell shipped 19 percent more units but still missed Wall Street’s targets for sales and profits. He concluded that Dell “sold a lot of low-end stuff” and cut prices in the face of tough competition. ‘The store shelves are fairly crowded,’ Wu said. Hewlett-Packard Co. and Apple Inc. ‘are doing very well globally. Those are two really tough guys to compete with.'”
Full article here.
MacDailyNews Take: Hey, we just thought of something that Michael Dell could do to fix this mess quickly: Shut it down and give the money back to the shareholders.
At this rate, Michael Dell and Don Carty will be the only ones left.
Don’t forget to turn the lights out.
Looks like everyone who needed a cheap, useless litter-box of a PC already has one.
mr. wu really loves our company. it is actually refreshing to have an analyst who always finds a positiv spin on all things apple.
Did I wake up in some sort of parallel universe? Someone is using the word beleaguered to describe Dell!
Where is Alienware?
“To put it plainly, Dell’s margins suck.”
imagine that. a company built on the idea of razor thin margins and no value added, has no margins, and no value.
DELL must make only about 0.02 per unit it sells. DELL ran other PC makers out of biz and now karma kicks in. Soon it won’t be anything left to give back to the share holders.
Gene Munster is even better. lol
This makes me so happy… schadenfreude.
“DELL must make only about 0.02 per unit it sells.”
That’s why they had to shut down the Dell kiosks. The “Take a Penny, Leave a Penny” dish was killing their margins.
With a quarterly report this bad, Dell’s share price is likely to skyrocket! (If we mirror Wall Street’s take on Apple performance.)