Dell Profits Cut in Half

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Dell has had a fairly rough time this year, with its recent earnings report indicating that the company has seen a relatively small decline in revenue, but a fall in profit by over 50%.

According to Cnet, Dell managed to match industry analysts’ predictions when it came to revenue, reporting $12.9 billion, but the problem is that profit hasn’t been quite as good as revenue, with Dell seeing profit drop by fully 54%, to the tune of 17 cents per share. Dell has placed the blame fairly firmly on the reception of Windows 7, which, while good, didn’t really live up to Dell’s expectations. At a conference, Dell CFO Brian Gladden said of the fall,

“We saw some weakness in orders in some of the weeks preceding Windows 7 … our inventories were in place and people were waiting to see how the launch went. After the launch we saw a surge in orders. We believe that affected our October revenue a bit, but we’ll ship that through in the fourth quarter.”

So, things could certainly be looking up for Dell when it goes through its next quarterly report, especially seeing as it’ll get to compound the usual holiday PC buying bonanza with the upswing in sales it’s seen from Windows 7. If everything goes quite as well as Dell has indicated it could, it seems as though Dell could be in an enviable position by this time next year.

For now, we’ll be curious to see how well Dell recovers. It’s interesting to see that it’s doing well with small and medium businesses, if only because that indicates that small and medium businesses are buying, which is excellent to see in economic hard times.

We’ll also be curious to see how the release of Dell’s Mini 3 smartphone effects the company’s profit line, but we’d be quite surprised if it doesn’t perform well… Dell’s success with its netbook line have earned it a bit of a fanbase when it comes to mobility.

If you’d like to have a look at Dell’s situation in more detail, Cnet has as much detail as you could possibly want, so you’d do well to check it out.

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