Beleaguered Dell’s earnings fall 79% as Windows PC sales fall

“Dell Inc, the subject of a takeover battle between activist investor Carl Icahn and the company’s billionaire founder, reported a 79 percent slide in profit as personal computer sales continued to shrink,” Poornima Gupta and Edwin Chan report for Reuters.

“Its ‘end-user computing division,’ linked to PC sales, slid 9 percent,” Gupta and Chan report. “The company that had been upheld as a model of innovation as recently as the early 2000s is steadily ceding ground to lower-cost Asian rivals and mobile hardware makers like Apple Inc.”

MacDailyNews Take: Who held it up as a “model of innovation,” exactly? Whatever innovation there was (BTO assembly and shipping), it certainly wasn’t contained in the products they excreted out to their pitiable customers.

Gupta and Chan report, “Net income fell to $130 million from $635 million a year earlier. Excluding certain items, income was down 51 percent to $372 million, or 21 cents a share, from $761 million, or 43 cents a share, a year earlier. That lagged by far the 35 cents Wall Street had expected. Revenue in its fiscal first quarter ended May 3 fell to $14.1 billion, higher than the average analyst estimate of $13.5 billion according to Thomson Reuters I/B/E/S.”

Full article here.

MacDailyNews Take: Oh, what a lovely way to start off the day!


        1. Yeah. Unless you provide a clue to your sarcasm, you understand retribution, right?

          There are lots of ways to clue people into sarcasm. It could be through the use of clearly ridiculous language, at least something more ridiculous than the average troll. That is where you failed in this case. We have paid, or unpaid, trolls come here to dis on Apple who sound exactly like you in your ‘sarcastic’ post. Thus… retribution.

  1. Maybe, model of innovation is not the proper title. But in all fairness, Apple did model their online store after Dell’s. I cannot remember the name of the company (powermax??) that they purchased which did had the online sales model already in place and was working quite well. After SJ came back and cancelled all licenses he made the purchase and, as they say, the rest is history…

    1. But in all fairness, Apple did model their online store after Dell’s.

      NO. Dell designed their store using APPLE software called WebObjects. That’s right. Dell’s store ran on Apple software. Then Mikey got all loonerrific about Apple, started making inane pronouncements of doom and redesigned their web store on some other code.

      Meanwhile, Apple, the owners of WebObjects since their purchase of NeXT, also designed their web store using WebObjects. The Apple Store runs on WebObjects to this day.

      Please check your facts before opening your mouth.

  2. Dell is toast. Michael Dell has had one good idea in his career. Custom build computers. It made him and a lot of other people rich. But that was a long time ago. The dominoes are beginning to tumble.

  3. @ rick? Err bit mixed up there, SJ cancelled the cloner’s licenses he didnt buy the store…
    The Dull Store was running on Next technology—WebObjects. Microsoft didn’t like that an Apple product powered one of their main hockers, so they spent 7 man years trying to redo the store sans what was now Apple technology.

    1. Thank you KillBill for providing information I had forgotten. It was indeed MICROSOFT who stuck a hot poker up Mikey’s nether region in order to convince him to get off the Apple software for his store. IOW, it wasn’t entirely Mikey’s idea.

  4. I can’t wait until the headlines here start reading “Beleaguered Samsung..” But that’s not gonna happen until Apple releases a big screen IPhone. The biggest reason cited by people I encounter for having a Samsung is that it’s a big screen alternative to the iPhone. Let’s get that big screen motherfu$&@/ out already so we can bury that Korean biatch. I personally will stick with something that fits in my pocket but there is big demand for the big screen.

    1. That is anecdotal, but actually NOT supported by data.

      Big phones represent only 6% of all Androids sold. In other words, if we exclude all iPhones from the total numbers (since they would skew the numbers even further in favour of standard-size screens), and look only at the Android market, where consumers had a free choice of screen sizes, 94% of them chose standard sizes, rather than big screens.

      People who have, or who want, big screen phones are extremely vocal. Much like those who complain about the glossy Macs. Both groups represent a very small percentage of the general population, though.

      1. You’re comparing apples to oranges. I’m not talking about Android in general, I’m talking specifically about Samsung whose biggest money makers are the Galaxy and the Note phones which are big screen phones. Samsung took 43% of smartphone profits last quarter, which is clearly eating into Apple profits whose profits dropped from 69% in the previous quarter to 59% in the last quarter. It’s the big Samsung phones I want to bury.

        1. Data still doesn’t support your claim.

          While those big “phablets” tend to be on the top end of Samsung’s price scale, the number of people who are buying them is still fairly small. If we assume that Samsung took half of Android market, and no other manufacturer sold any meaningful number of phablets, leaving Samsung with all of those phablet sales, it would still mean that they were barely 10% of all Samsung Android phones sold. And this is assuming nobody else sold ANY phablets.

          Burying Samsung’s big phones won’t really affect anyone’s bottom line, nor market share. They occupy a fairly small corner of the market, and the only reason we’re talking about them is because those who want them (or have them) are very vocal about it.

  5. In the early 2000s I was working in an IT data center for a Fortune 500 company. Luckily I worked on the big iron side of things. The company bought mostly Dell desktops and laptops. There was a time that “no one ever got fired for buying an IBM”‘. That had switched to Dell at this company by the time I moved to IT.

    The laptops weren’t as nearly as bad but the Optiplex series had a 25% DOA rate at the time according to the PC guy . And this was when Dell ruled the roost. Dell didn’t care and neither did the company as Dell replaced the units without question or charge. In their race to the cost bottom they used whatever supplier was cheapest that day. That was their only nod to “innovation”. Supply…

    When I told people of this, not to buy Dell and that they’d be dead in the water within a decade almost everyone said I was crazy. Now that once highly desired company has been sold off for parts much the same way (and for similar reasons) as Dell. Birds of a feather in corporate America, I guess.

  6. Wow, that’s so amazing and sad. Dell had revenue of $14.1 billion, and ended up w/ $130 million in profit. Apple on the other hand had revenue of $43.6 billion, and ended up w/ $9.5 billion in profit. I wonder what kind of advice Mikey has for Apple now?

  7. Dell was innovative in selling components initially and then moving to assembled boxes while creating a commodity PC for the masses and business. Of course we all know that the products weren’t very good but they still sold.

    1. From my perspective, it was the demand for cheap crap PCs that killed Dell. They squeezed their profit margin, indeed happily foisting cheap crap, until there was no profit. Having lots of sales but no profit and no respect within your market doesn’t work inside a capitalist system. And it’s a good thing too. Bub-bye Mikey!

    1. The stock market is increasingly a head game, a mind f*ck. You’d have to be an economist psychologist to get the hang of what little sense there is in the stock market these days. Clearly, the stock market is no longer about the actual value or promise of a company. Instead it’s all about marketing, in the worst sense of the word.

  8. This is worth repeating: Dell generated $14 billion in revenue, but only $130 million in profit. That is less than 1% (ONE PERCENT!!!).

    Apple generated $43 billion in revenue (about three times as much as DELL), but of that $9.5 billion was profit (almost 40%). Almost 80 times more money than DELL, from just three times more revenue.

    Can the difference be ANY starker??

  9. A 79% drop in net income yr over yr is an absolute tragedy, yet you don’t see it all over the web and in the news. Apple had a drop in market value that should’ve been out shadowed by an obscene increase in net income and Wall St began writing a eulogy. If this isn’t enough to alert folks to how terrible financial analysts are at predicting Apple’s outcome, I’m not sure anything will (unless its Lady Gaga, Justin Beiber, or whoever else the sheep praise).

  10. Moot good.
    At least they have been trying to turn around by acquiring other companies and trying to get into the service business like IBM. We will see where this goes. I think they will be around but perhaps in a smaller form.

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