Dell Earnings: Revenue Drops on Decreased Desktop & Mobility Sales

Dell reported its earnings for Q2 FY13 today, with revenue declining 8% to around $14.5 billion and operating income dropping 21% to $0.9 billion. While its services revenue increased marginally, revenue from products declined nearly 10%. In the products business, storage, mobility and desktop devices saw the greatest decline in revenue.

It reported a net profit of $732 million, down 18% year-over-year, as sales declined and R&D expenses jumped nearly 27%.

Michael Dell, Chairman and CEO, said:

“We’re transforming our business, not for a quarter or a fiscal year, but to deliver differentiated customer value for the long term. We’re clear on our strategy and we’re building a leading portfolio of solutions to help our customers achieve their goals.”

Dell’s stock has dropped nearly 5% following the earnings release, as it also lowered its outlook for the coming quarters, and is currently trading near its 52-week low.

As the desktop market is expected to see a decline in growth in the coming years, Dell’s earnings will continue to be hit since desktop products account for a major portion of its overall sales. The launch of Windows 8 might offer some respite, but Dell’s earnings will be pressured not only by increasing competition in the desktop space, but also by the shift to mobile devices where it hardly has a significant presence.

via Dell – SEC

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