Dell revenues torpedoed by enterprises

 

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By Stuart Turton

Posted on 28 Aug 2009 at 10:21

Dell watched revenue tumble 22% in its second quarter, as enterprises continue to show caution in their IT spending.

Revenue was down across every business unit, falling to $12.76 billion in Dell's second quarter, with net income decreasing 23% to $472 million year-over-year.

At the heart of Dell's woes was a continued reticence in the enterprise market, where sales were down 32% to $3.3 billion from the same quarter last year. According to the company, enterprise IT spending was down in every region, a situation it does not expect to improve this year.

Shareholders must be getting that sinking feeling, given that sales to corporate customers account for approximately 80% of Dell's sales, according to the company.

However, there were a few bright spots. Enterprise spend was up 3% from the previous quarter and while consumer sales were down 9% from last year, they rose 2% on the last quarter. These modest improvements were enough for Michael Dell to paint a smile on and suggest that stability may be returning to the market.

"If current demand trends continue, we expect revenue for the second half of the year to be stronger than the first half," says Dell. "We are expanding our capabilities in enterprise technology and services and investing in or core business to distinguish Dell both with customers and in operating performance."