Dell reports 51% earnings drop

Posted by Wolfgang Gruener

Dell experienced another tough quarters, in which the company was able to slightly increase its sales, but faced a sharp decline in net earnings. Revenues of $14.1 billion represented a 5% increase over Q2 of last year, but profits dropped about 51% from $1.02 billion to $502 million the same time frame. "Aggressive" pricing in a "slower" market resulted in a record market share of 19.3% but also "in operating income which was lower than its May expectations on similar revenue," Dell said in a press release.

Chief executive officer Kevin Rollins noted that he was "disappointed" with the quarter result, but mentioned that the company is taking measures to correct "missteps and improve operations. "Key actions include accelerating cost initiatives, increasing investments in service and support, and better pricing management."

To improve its long-term outlook, Dell said that it will be working to enhance "customer experience" and "satisfaction" and will introduce new ways of customer services such as the "Dell Connect" service, which allows Dell technicians to remotely fix problems on computers. Dell also announced that it will be offering AMD-based 4P and 2P-server as well as "Dimension"-branded desktop systems for the first time in its history. Dell said that its "partnerships with AMD and Intel will greatly enhance its ability to end the year with the broadest and best product line in its history."