Dell watches profits decline 63%

 

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By Stuart Turton and Reuters

Posted on 29 May 2009 at 10:25

Dell has announced a steep drop in profits, as the slumping PC market takes its toll.

Dell says net income fell to $290 million during its first quarter, from $784 million a year ago. That's a 63% decline over the course of the year.

Dell's revenues also took a battering, falling 23% to $12.3 billion.

The company gave little comfort to investors looking for signs of a quick turnaround, saying there was not enough momentum in the PC market to call a bottom yet. The only ray of hope came from the suggestion that there may be a surge in sales next year as corporations replace their computer systems.

Dell says it is now focused on cutting costs in a "challenging" environment, concentrating more on profitability than growth. In February, Dell boosted its 2011 cost-reduction target to $4 billion from $3 billion.

The company cut its overall headcount by more than 9,000 jobs last year, ending with a total headcount of 78,900. It declined to give a new total for the end of the last quarter.