Dell profit down 23 pct but surpasses estimate
Dell profit sinks 23 percent in slumping PC market but beats Wall Street estimates
* By Jordan Robertson, AP Technology Writer
* On Thursday August 27, 2009, 6:57 pm EDT
finance.yahoo.com
SAN FRANCISCO (AP) -- Dell Inc.'s second-quarter profit was whacked 23 percent as the personal-computer industry's slump dragged on this summer. The results beat Wall Street's forecast, however, sending the shares up more than 6 percent.
Dell's results reinforce a trend outlined in the latest numbers from rival Hewlett-Packard Co., the world's No. 1 PC seller, and supplier Intel Corp., the biggest computer chip maker: Consumer demand for PCs is perking up, but spending by corporations is still weak.
Dell's shipments of consumer PCs increased 17 percent over last year, while revenue in that category was down 9 percent to $2.9 billion. Price-cutting explains the discrepancy. PC makers have been slashing prices to preserve market share. Consumers also have been favoring little "netbook" laptops that generate lower profit margins for manufacturers.
Dell's sales to corporations fell 32 percent from last year to $3.3 billion.
Round Rock, Texas-based Dell is especially vulnerable to anemic business spending, because 80 percent of its revenue comes from corporations, government agencies and other institutions. |
