Dell profit sinks 54% in quarter
SAN FRANCISCO - Dell Inc. said yesterday its net income dropped 54 percent in the latest quarter amid signs the company isn’t fully benefiting from the computer industry’s fledgling recovery.
Dell’s numbers missed Wall Street’s forecasts, and the shares fell almost 6 percent in extended trading.
In the last quarter, Dell lost its ranking as the world’s number two personal computer maker, a slot now held by Taiwan’s Acer Inc. Dell rivals such as Acer and Hewlett-Packard Co. have stolen market share in part by exploiting their bigger presence in retail stores. That has been a big weapon because consumer interest in little laptops called “netbooks’’ has helped the PC industry start to pull out of its worst slump in years.
Instead, Dell gets 80 percent of its business from corporations, government agencies, and other large institutions, which have remained hesitant to spend money on new technology.
The company has said it is willing to lose some market share rather than lower prices too much. That is a key part of Dell’s strategy to improve its profitability - an effort that has included a huge restructuring.
Dell is also trying to expand into more profitable markets through acquisitions. The most significant is Perot Systems Corp., a technology services company Dell is buying for $3.9 billion.