Dell on Q4 results: ‘We have much work to do’

29 Feb 2008

In the past year, Dell has employed an energetic strategy to strengthen its position in the consumer market in both Europe and the US with its brightly coloured laptops for sale in retail chains such as Dixons and Tesco.

This kind of strategy involves much financial investment and appears to have taken its toll on the computer manufacturer’s fourth-quarter results.

Dell’s Q4 profits dropped by 6.4pc to US$679m, while actual sales rose by 10.5pc to US$15.99bn, although this level of sales did not quite meet analysts’ expectations.

In order to drive profitability the company says it will be “addressing cost and productivity across its entire operations”. Whether this means more job cuts is uncertain but Dell has shed 3,200 jobs over the past eight months.

“While Dell continues to drive towards a world-class cost structure and competitiveness, we have much work to do,” warned Dell chairman and CEO Michael Dell.

However, Dell remains hopeful going forward: “As businesses and consumers worldwide join the connected age, one that’s underscored by more data, more devices and more users, we see enormous opportunities to enable them to simplify IT and participate.”

The company noted that new mobility products helped drive sales in this area, with an increase of 24pc, while unit shipments were up by 37pc.

Dell’s outlook for the near future predicted that as it adjusts its business model to grow sales and profitability, the company will most definitely continue to ring up costs.

By Marie Boran