Consumer sales responsible for 33 percent drop in profits

Dell has announced its fiscal-year 2013 first-quarter results on Tuesday, as the continuing skid in profits continues. Quarterly revenue was down four percent from a year ago to $14.4 billion. Profit continues to fall and dropped a staggering 33 percent to $635 million. The consumer division continues to weigh down the company, with a revenue of $3 billion, a 12 percent decline year-over-year.

Large enterprise revenue was $4.4 billion, a three-percent drop. Other results confirm the wisdom of the ongoing shift away from consumer products and towards storage and small business services. Revenue from small- and medium-size businesses grew four percent to $3.5 billion, while revenue from enterprise solutions and IT services increased 17 percent.

International numbers were mixed. Asia-Pacific and Japan revenue showed no significant increase or decrease, though Chinese sales and revenue increased nine percent. North and South America revenue fell seven percent.

In response to the report, chairman and CEO Michael Dell said "We're committed to continuing our strategy to re-shape Dell's business as an end-to-end IT provider. We saw continued progress in our first quarter with the innovative IT solutions we're providing – notably our latest Dell servers, storage, networking and services that deliver customers enhanced productivity." The company's chief financial officer added that the continuing shift to enterprise solutions and business services accounts for 50 percent of their gross margin, and they will continue to adjust the business to maintain forward progress.

Dell analysts expect second quarter revenue to be in line with trends and climb between two and four percent from this quarter, despite profits falling for three consecutive quarters contrary to historical and overall industry trends. No specific explanations for the unexpectedly low numbers were issued by Dell.

By Electronista Staff

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