Dell Q3 profit hit by low PC sales, declines 47 per cent to $475 mn

Computer maker Dell has reported 47 per cent drop in net profit to $475 million for the third quarter ended October, mainly on lower PC sales and weak demand from large enterprises.

The company had posted a net profit of $893 million in the corresponding period last year. It follows the February-January financial year, which ends on the last Friday of the month.

Dell's revenues also dropped by 11 per cent to $13.72 billion in the third quarter of FY13 from $15.36 billion in the year-ago period, a statement from the company said.

Its revenues were down by 5.24 per cent sequentially as the same stood at $14.48 billion in second quarter of FY13.

Once the world's top PC maker, Dell is now struggling to defend its market share against rivals like Acer and Lenovo and tablets like Apple's iPad. Revenue in the US was down 9 per cent, while that from Europe, the Middle East and Africa was down 15 per cent.

"Revenues from the Asia-Pacific and Japan (APJ) region, which includes India, were down 11 per cent year-on-year," Dell President, APJ, Amit Midha said. He, however, did not comment on country-specific numbers.

Dell had guided third-quarter revenues to be down 2-5 per cent from second-quarter levels on account of uncertain economic environment, competitive dynamics and soft Consumer business.

For the fourth quarter, Dell expects a sequential revenue growth of 2-5 per cent.

"Dell sees the challenging global macro-economic environment continuing in the fourth quarter, which will continue to impact the company's results. The company expects sequential revenue growth of 2 to 5 per cent," it said.

For the full year, Dell maintains its expectation for at least $1.70 in earnings per share on a non-GAAP (Generally Accepted Accounting Principles) basis, it added.

Dell's revenues in Enterprise Solutions and Services business grew three per cent year-on-year to $4.8 billion in the August-October 2012 quarter.

"We are consistently executing our end-to-end solutions strategy for the benefit of our customers. In the quarter, we completed the acquisition of Quest Software which - along with other recent acquisitions like SonicWALL and Wyse - adds leading management, security, virtualisation and cloud capabilities to our expanding portfolio of powerful solutions," Dell Chairman and CEO Michael Dell said.

The company's server and networking revenues grew 11 per cent. Revenues from Large Enterprise business was $4.2 billion in the quarter, a eight per cent decline, while public revenues saw a 11 per cent fall to $3.8 billion, the company statement said.

Small and medium business revenue was $3.3 billion, a one per cent decline, while consumer revenue was $2.5 billion, a 23 per cent decline, it said.

with inputs from PTI