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.)
“that means more layoffs on top of the 3,200 jobs already eliminated in the past year — to boost profits”
If layoffs boost profits that much perhaps Dell should start laying off people they haven’t hired yet. That should *really* help the bottom line. Makes as much long-term business sense as the other things they’ve tried so far.
Did you know DELL just released new laptops? Ho Hum…..
“Once golden image”? Dell maintains a golden image and it’ only going to get better.
I envision a shower of gold for Dell. A warm, bright, shining, golden shower for one of the tech industry’s giants. The Ditty remains a marvel of innovation and engineering. I think if Dell simply updates the Ditty they’ll be back on top.
Hold your head up high for that golden shower to come, Dell. You’re still number 1 in my book.
Your potential. Our passion.™
Geez Zune!
OD on B vitamins
“A warm, bright, shining, golden shower for one of the tech industry’s giants.”
I hope you’re not going to break into a round of “Urine the Money.”
translation
Mike Dell is worth less than Steve Jobs stool ( as in Sh*t )
“Hold your head up high for that golden shower to come, Dell.”
Cut it out, Zune Tang. This is a family show!
Zune Tang my man, I really miss you when you’re away, even for a day
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The PC market is suffering the ills of any product in it’s mature stage. Prices have continues to come down and they have to maintain support as well which takes away from magins. This is a prime reason why Apple has never licensed anyone else to make PC’s that can run OSX exclusively. Dell should also be sending some dog droppings to Microsoft as Vista has done nothing to drive new demand for PC’s
While it’s fun to dump on Dell, other companies may be hard pressed to meet their financial guidance in the months to come. Significant economic challenges are in the winds. Subprime markets and credit crunch, drop in housing prices, consumer spending flat, oil over $100 barrel and persistent talk about recession by economist all add up to an economic downturn reminiscent of the 70’s.
The drop in Apple stock since early January is not by chance. Those in the know got off the band wagon at the right time. Apple may be pressed to meet their own guidance this quarter. Time will tell.
It is too bad that the best way to please wall street and up your books short term is by firing a bunch of workers.
Everybody here knows I remember Christ when he was a juvenile delinquent, right? I’m old, and many of my friends are the same. Last night I was driving one home – she and my wife took in a Rock Opera earlier – and we were talking about personal tech. She wants to know if we know of any kids who can help some of her friends out with their Windows machine. (No, sorry.) Then we discovered she was hoping she could restrain herself from tossing her Dell out the window until AFTER she buys a Mac. We gave her better advice about which models to consider … she’s one frustrated soon-to-be-switcher.
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Dave
<blush>Ampar … thank you. I was wondering if ZT was off his game. No … I was the one caught sleeping. </blush>
ZT … excellent take! Neon Red aside … OK, I missed it, too. DOH!
Dave
“$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”
Some could argue that Dell provides better value to its customers by not charging such high margins. Just saying….
Dell = cheap PCs at cheap prices and no margins = One Trick Pony.
As a one trick pony, once you’ve performed your trick the show’s over or, in this case, you’re out of business. It’s only a matter of time. How soon before they get delisted from NASDAQ?
Every major corporation that gets in trouble ends up laying off workers, as if the workers were the ones deciding policy. They executed on the directions they were given FROM THE TOP.
Yo, Mike, guess what I would do if I were you? Shut it down, give the $ back to the shareholders and STFU! Karma’s a bitch, ain’t it?
Peace.
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Olmecmystic