Dell and HP report poor second quarter results

By on August 23, 2012, 12:26 AM

Dell has posted second quarter financials and the prognosis is pretty bleak. The PC business posted revenues of $2.6 billion which is 22 percent less than the same time period last year. The overall picture isn’t as bad, however, with revenue of $14.5 billion, just eight percent fewer year over year. A drop in desktop and mobile sales in addition to the overall troubled economy is to blame, Dell says.

Dell had the most success in the enterprise market with a six percent increase in revenue since last year, good for $4.9 billion. This represents more than a third of Dell’s overall income stream and is being billed as proof positive that the company’s decision to focus on the enterprise was a good move.

"We continued our progress in shifting the mix of our business to higher-margin enterprise solutions, led by solid growth in our server, networking, services, and Dell IP storage businesses," said Dell's CFO Brian Gladden.

Company stock value dropped 5.4 percent following the earnings report and has lost 20 percent this year. Shares closed at $11.68 on Wednesday.

Meanwhile HP reported their worst loss in the company’s 73-year history as revenue dropped five percent in addition to $9.2 billion in write-downs. This marked the company’s fourth consecutive quarter of falling sales although a large portion of the write-off came from a 2008 acquisition of Electronic Data Systems. The company noted their PC group dropped 10 percent year over year but much like Dell, HP expects to make up some lost ground in other areas. 

Both companies face similar forecasts for the rest of the year as consumers are waiting for the arrival of Windows 8.




User Comments: 5

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Guest said:

And Windows 8 aint gonna help either

Guest said:

It seems as the margins for computers are low, the performance of low end to mid range computers covers most people, the market is saturated and the economy is slow that this is what is going to happen. Dell appears to be trying to become more of a service based company to business and HP, who knows what they are trying to do.

Guest said:

well... I can resume this situation with this.....the dell machines are expensive, they give you less for the normal high price but if you pay the premium price they make you think that you are happy with the little upgrades, now the displays they offer at least for their laptops have a horrible quality, so....thats why the people are not buying....if you will spend the same money....well make it count with other brands.

Win7Dev said:

well... I can resume this situation with this.....the dell machines are expensive, they give you less for the normal high price but if you pay the premium price they make you think that you are happy with the little upgrades, now the displays they offer at least for their laptops have a horrible quality, so....thats why the people are not buying....if you will spend the same money....well make it count with other brands.

Pretty much this. They got rid of their good xps laptops for crap that is just as expensive as macbooks. When I can get basically double the performance for the same price with an asus laptop, of course I'm not going to choose dell. Compare an asus n56vz (which I can get for exactly $999.99 without tax on it) to a dell xps 15 which starts at $1299.99 for less powerful hardward. The same specs cost almost $2k. The asus is pretty thin too for a quad core processor with very nice graphics (nvidia gt650m).

Guest said:

They both need to make their machines distinctive and have some design.

The days of the ugly box are over. Make it hidden (small or integrated) or make it slick and worth showing off.

Apple users fawn over their vacuous, brushed aluminium so why not PC users too. The laptop area seems to have come on leaps and bounds.

Ikea is even integrating electronics into furniture. Customization is what PCs are all about so give us PCs that look like 1920s radios or a black polished globe or fit inside an HDMI stick.

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