“Dell has been in cost-cutting mode, focusing on profitability over growth during the downturn. It stayed clear of a price war in the PC market, and posted big market share losses as it protected its overall margin profile,” Madway reports. “But Dell reported an adjusted gross margin of 17.4 percent in the January quarter, down from 18.2 percent last year and below Wall Street’s expectations.”
“Chief Financial Officer Brian Gladden said gross margins were hurt by a larger mix of lower-cost PCs for consumers, and some higher component costs, including DRAM memory,” Madway reports. “But Gladden said there were positive overall signs in the technology industry, and that Dell is “cautiously optimistic” about how the new fiscal year is starting.”
“Dell, whose results had missed Wall Street targets for three of the previous eight quarters, said net profit fell to $334 million, or 17 cents a share, in its fiscal fourth quarter ended January 29, from $351 million, or 18 cents a share, in the year-ago period,” Madway reports. “Revenue rose 11 percent to $14.9 billion, also beating the average estimate of $13.8 billion.”
Madway reports, “Cross also said Dell’s operating expenses did not fall as much as some investors had hoped. Dell reported adjusted operating expense at 12.1 percent of revenue, versus 12.8 percent a year ago.”
Full article here.
MacDailyNews Take: It’s getting worse. This time around, beleaguered Dell could only manage to squeeze $334 million out of $14.9 billion. That’s a lot of effort for comparatively nothing. Contrast beleaguered Dell with Apple, which last quarter posted a profit of $3.38 billion on $15.68 billion. Dollar for dollar, Apple makes roughly 10 times what Dell makes. The net result is that Apple continues innovating and delighting customers while Dell continues closing box assembly factories and axing employees. This is how the race to the bottom – ironically, a race set up and started by beleaguered Dell – sputters to its natural end. Mikey, before it’s too late, SIDAGTMBTTS.