Dell reports Q2 earnings, with profits falling 72 per cent ahead of potential buyout
Longtime computer manufacturer Dell has produced some struggling Q2 earnings, ahead of a vote by the board to decide whether the company goes private or not.
Dell announced on Thursday a not-too-shabby $14.5 billion in revenue for the quarter (flat from the previous year), but the real trouble came in the profit sector. The company reported $204 million in net profit, down a whopping 72 per cent from the $732 million it reported in the same quarter last year.
“In a challenging environment, we remain committed to our strategy and our customers, and we’re encouraged by increasing customer interest in our end-to-end solutions offerings and continued growth in our Enterprise Solutions, Services and Software businesses,” said Brian Gladden, Dell's CFO.
Revenue for the quarter was made up of $9.1 billion (down five per cent) for end user computing, $310 million with an "operating loss" for software, $2.1 billion (up two per cent) for services, and $3.3 billion (up eight per cent) for the enterprise sector of Dell. Operating profits in the end user computing unit fell 71 per cent.
Interestingly, Dell CEO and founder Michael Dell didn't provide any remarks for the earnings on Thursday. The set of earnings could have been the last for Dell as a publicly traded company, as it seeks to go private. Furthermore, Dell didn't provide an outlook for the current quarter, something typical with earnings reports.
Michael Dell - Dell Inc's largest shareholder - and private equity firm Silver Lake have agreed with a Dell Special Committee to purchase Dell Inc for $13.75 a share. Dell wants to take the company private in an effort to focus on enterprise, software, and services - putting less of a focus on the dying PC brand. Dell Inc's second-largest share holder, Carl Icahn, wants to nix the plan and restructure the public company, rather than go private. Things are still in the works.
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