Dell’s profits fall despite strong sales
Dell’s profits declined by 4.8% during its fourth quarter, despite an increase in sales across the board.
Rising component costs coupled with price cuts meant that despite an 11% increase in revenue to $14.9 billion from last year, Dell’s income slipped to $334 million from $351 million a year ago.
The results disguised increased sales in each of Dell’s business units, most notably its small and medium business segment, which saw revenue hit $3.3 billion – a 10% increase on last year. Dell’s consumer PC business also had a solid showing, with revenue rising to $3.5 billion.
Speaking on a conference call to announce the results, Dell’s chief executive Michael Dell claimed the company’s services division would soon begin picking up the slack.
However, in the meantime Dell’s shareholders have to contend with a 13% drop on full-year revenue to $52.9 billion from fiscal 2009. Full-year net income was $1.43 billion, a 42% drop from the previous fiscal year.
The results come in sharp contrast to those posted by HP, which saw profits leap 25% on the back of strong sales of consumer PCs, servers, and printers.