Supported by
Dell’s Earnings Fall 79% as Sales of PCs Fade
Dell, the subject of a takeover battle between the activist investor Carl Icahn and the company’s billionaire founder, reported a 79 percent slide in profit as personal computer sales continued to shrink.
Michael Dell, the chief executive, and the private-equity house Silver Lake want to take the world’s third-largest PC maker private for $24.4 billion, arguing that its transformation into a provider of enterprise-computing services was best conducted away from public market scrutiny.
Reflecting that shift in focus, Dell reported Thursday that revenue from enterprise solutions, services and software was up 12 percent to $5.5 billion, while overall revenue slipped 2 percent. Its “end-user computing division,” linked to PC sales, slid 9 percent.
Icahn and a major stakeholder, Southeastern Asset Management, say Michael Dell’s deal is too cheap for a company trying to challenge I.B.M. and Hewlett-Packard in enterprise computing. They are proposing new leadership and additional cash or stock for shareholders.
Net income fell to $130 million from $635 million a year earlier. Excluding certain items, income was down 51 percent to $372 million, or 21 cents a share, from $761 million, or 43 cents a share, a year earlier. That lagged by far the 35 cents Wall Street had expected.
Revenue in its fiscal first quarter ended May 3 fell to $14.1 billion, higher than the average analyst estimate of $13.5 billion, according to Thomson Reuters.
The company said it could not provide a financial outlook because it was in the midst of Michael Dell’s go-private deal.
Shares in Dell stayed flat in after-hours trade, at $13.44, after closing at $13.43 on Nasdaq.
Explore Our Business Coverage
Dive deeper into the people, issues and trends shaping the world of business.
Landline Pride: Traditional phones may seem like relics in the iPhone era, but a recent AT&T cellular service outage had some landline lovers extolling their virtues.
C.E.O. Dreams: Fresh business school graduates are raising “search funds” from willing investors to buy companies they can lead.
Nelson Peltz Wants Respect: The longtime corporate agitator feels misunderstood. Maybe his fight with Disney could change that.
The Palm Oil Supply Chain: An E.U. ban on imports linked to deforestation has been hailed as a “gold standard” in climate policy. Southeast Asian countries say it threatens livelihoods.
Tough Times Ahead: As the prices for office space in urban centers tumble, cities whose municipal budgets rely on taxes associated with commercial real estate are starting to bear the brunt.
Going Solo: In Taiwan, the government is racing to do what no country or even company has been able to: build an alternative to Starlink, the satellite internet service operated by Elon Musk’s rocket company, SpaceX.
Advertisement