Weak results, tumbling shares for Dell

30 Nov 2007

While overall sales for Dell came in at US$15.6bn for the quarter ended 2 November 2007, meaning a 9pc increase on the last quarter, sales in the US consumer market dropped by 6pc – further bad news for the company that lost its No 1 position in PC sales worldwide two years ago.

When the Texas-based computer company revealed profits of US$766m for this quarter that translated into 34 cents per share this fell short of Wall Street analysts predictions of 35 cents.

On the back of this slight shortcoming Dell shares fell by a staggering 10pc late yesterday evening as cautious investors also looked to the weak consumer sales stateside.

Year-on-year growth of Dell’s net revenue may have only been 5pc for the Americas but the company is doing considerably better in other regions with 14pc growth in Europe and a strong growth of 18pc in Asia Pacific/Japan.

Laptop sales, which were up by 19pc year on year, drove net revenue while desktop sales actually dropped by a percentage point, although desktop PCs still pull in 30pc of total net revenue for the company.

Earlier this year Dell ran into problems when an internal investigation revealed improper accounting procedures used to ‘cook the books’, or display inflated figures of previous financial results.

By Marie Boran