Dell may have posted revenues of $13.9 billion for the third quarter (an 11% year-over-year increase) but its earnings dropped 28% to $606 million from $846 million a year earlier.
There was a time when Dell projected third quarter revenues to hit as much as $14.5 billion, but it reduced that estimate in October. In addition, Dell mentioned that it will suffer losses of about $442 million. This figure was well divided between a $300 million loss for OptiPlex desktop fixes and $100 million for letting approximately 1,000 employees go.
Although PC sales continued to be the main source of revenue for Dell, computer sales actually dropped to $5.1 billion from $5.2 billion a year earlier. Following is a further breakdown of Dell’s revenue sources.
- laptop revenue increased from $3.1 billion to $3.6 billion
- server sales rose to $1.4 billion from $1.2 billion
- storage sales jumped to $500 million from $300 million
- services rose to $1.2 billion from $1 billion, and
- software and peripheral revenue increased to $2.1 billion from $1.7 billion
Dell is forecasting fourth quarter revenue to be $14.6 billion to $15.0 billion but analysts state that Dell will have a hard time posting strong growth figures because of its huge dependence on PC sales and general industry pricing pressure.