Dell quarterly profits drop 72%

Tristan Kitchin August 16, 2013 0

It has been a difficult couple of weeks for technology companies. First BlackBerry, once a pioneer of smartphones, is offered up for sale amid due to a poor reception of its BB10 platform, and now Dell, once the PC world leader, sees its profits plunge as its founder attempts to take the firm private.

Dell’s quarterly profits have dropped 72% from a year ago as it struggled to overcome a stagnating PC market. Profits for the second fiscal quarter fell to £130 million, down from £470 million last year.

The company’s founder, Michael Dell, has been attempting to take the firm private as it struggles to make profit in an increasingly hostile computer market, a market which in recent years has been in decline. Despite hardware sales falling across the industry, Mr Dell said the company had been making progress in diversifying itself into new areas, including software and services.

Shareholders in the company are currently embroiled in a battle with Michael Dell over his attempt at a private equity buyout however, with many believing his bid undervalues the company significantly; investors, being led by Carl Icahn, have equated the deal proposed to a “giveaway”.

“In a challenging environment, we remain committed to our strategy and our customers,” Dell chief financial officer Brian Gladden said. Mr Dell believes a radical change in strategy and focus is needed however should the firm wish to survive.

In a market that in recent years has been moving away from PCs towards mobile devices, Dell has been left behind. Dell needs to change tactics if it is to survive in an increasingly mobile world, before it becomes too late and the company becomes an icon of a bygone age.

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