Dell announced on Thursday, that quarterly profit fell by nearly half - - 48% - - and the company said it expects demand to remain weak in coming months. Further job cutting is planned.
The world's No. 2 PC maker, announced, that it would also raise its cost-cutting target by another $1 billion, to a total of $4 billion by 2011.
Last month, Dell announced the closure of its main European plant, at Limerick, Ireland, with the loss of 1,900 jobs and a consequential impact on local suppliers. Dell retains about 2,000 jobs in Ireland.
Chief Financial Officer Brian Gladden said on a conference call, that the company is focused on cost cuts in a "very challenging" economy. "We expect similar weakness during our current quarter," he added.
Dell reported net income of $351 million, down 48% from $679 million in the year-earlier period. Its revenue fell 16% to $13.4 billion.
Last week, Hewlett-Packard (HP) reported a 13% fall in quarterly income.
Revenue for all of fiscal 2009 was $61.1 billion; full-year earnings were $1.25 per share.
Fourth Quarter Fiscal Year
| (in millions, except share data) |
FY'09 |
FY'08 |
Change |
|
FY'09 |
FY'08 |
Change |
 |
| Revenue |
$13,428 |
$15,989 |
(16%) |
|
$61,101 |
$61,133 |
0% |
| Operating Income |
$457 |
$776 |
(41%) |
|
$3,190 |
$3,440 |
(7%) |
| Net Income |
$351 |
$679 |
(48%) |
|
$2,478 |
$2,947 |
(16%) |
| EPS |
$0.18 |
$0.31 |
(42%) |
|
$1.25 |
$1.31 |
(5%) |
“Customers know they need information technology, and we think we’re best able to help them use IT to improve productivity,”saidMichael Dell, chairman and chief executive officer. “But a lot of IT spending is being deferred until there’s better economic visibility.
“Within our business, we’re being very disciplined in managing costs, generating profitability and cash flow, and investing in ways that separate Dell from others today and when the economy inevitably improves.”
Dell said that for the past 18 months, the company has been sharpening customer focus, redefining priorities, and speeding decisions and actions. It has also prioritized five growth initiatives – notebooks, enterprise technologies, consumers, small and medium businesses, and emerging countries – and achieved a number of successes in those areas, including:
-
Producing its best-ever enterprise and mobility products, overall winning more than 420 product and design awards last year;
-
Providing customers broader access to Dell technology through retail and commercial channel partners;
-
Improving profitability in the consumer business; and,
-
Growing faster than industry rates in the world’s most rapidly expanding economies.
Results detail
Dell's notebook PC sales fell 17% from a year earlier to $4 billion; desktop PC revenue dropped 27% to $3.5 billion, and its server business posted a 16% decline in sales to $1.3 billion
