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Friday, August 16, 2013
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Dell's quarterly profit Down Amid Buyout Talks
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Dell on Thursday reported a 72 percent slide in quarterly earnings as PC sales extended their downward spiral and the uncertainty related to the future of the company due to the takeover battle between its founding CEO and activist investor Carl Icahn.
Dell founder and CEO Michael Dell proposing a $25 billion buyout to take the PC maker private, and Icahn leading shareholder opposition on the basis that the offer is too cheap.
Sales from Dell's end-user computing division, which incorporates computers, slid 5 percent to $9.1 billion.
Its fortunes remain closely tied to PC sales, which still yield about half of revenue. Global sales of personal computers are expected to fall 7 percent this year and 4.5 percent next year.
For its fiscal second quarter, Dell reported sales of $14.5 billion, flat from a year earlier. But net income fell to $204 million, compared to $732 million in the year-earlier period. Gross margins slid a percentage point from the previous quarter to 19.6 percent.
On the briight side, sales from the enterprise solutions, services and software business climbed 9 percent to $5.8 billion.
"While the environment continues to be challenging, we remain focused and dedicated to this objective," Dell CFO Brian Gladden Gladden said in a public letter published on Thursday. |
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