Dell reports sharp profit slowdown
Dell reported a second fiscal quarter net profit for the period ended August 4 of 502 million dollars, marking a decline of 51 percent from the 1.02 billion dollars booked in the same period a year ago.
"While we are disappointed with the results for the quarter, we are taking the necessary actions to correct missteps and improve our results for the long term," said Dell chief executive Kevin Rollins.
"Key actions include accelerating cost initiatives, increasing investments in service and support, and better pricing management," Rollins said.
Dell also said it had started an internal probe into some of its accounting practices, amidst an ongoing investigation by the Securities and Exchange Commission into its accounting and reporting practices.
Despite the profit slowdown, Dell’s earnings were in line with Wall Street expectations as the company reported quarterly earnings per share of 22 cents, compared with 55 cents a year ago.
Overall revenues rose 5% to 14.09 billion dollars.
Dell had warned investors that its profit growth was likely to have slowed during the quarter as it vies to beat off aggressive price competition from the likes of Hewlett-Packard and other rivals.
It recently announced it would now use microprocessors from Advanced Micro Devices for the first time in a bid to fend off such competition.
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