Dell Q2 income up 46pc

31 Aug 2007

Dell’s net income for the second quarter of the fiscal year 2008 is up 46pc at US$733m, with the company citing lower component prices as a contributory factor.

Despite the increase in net income, Dell’s PC sales only increased 3.5pc to US$8.9bn although the company had brought out a new range of Vostro PCs for small businesses as well as making a deal with Ubuntu to provide its LINUX operating system as an alternative to Microsoft Windows.

Further factors affecting PC sales included a delay on the production line for its new line of colourful laptops which Dell has attributed to sourcing both paint and displays.

“While our results demonstrate we’ve made progress against our goals, we are still in the early stages of transforming our company’s structure, costs and operations,” said chairman and CEO Michael Dell.

Factors that affected the company’s operating expenses in Q2 included a payout of US$102m in expenses linked to payments for expired in-the-money stock options.

Production delays and payouts come in the wake of a recent internal investigation into “errors and irregularities” in the financial results of the last four years in order to give the appearance of better sales.

By Marie Boran