Dell profits edge lower despite revenue spurt

Other News Materials 29 February 2008 05:59 (UTC +04:00)
Dell profits edge lower despite revenue spurt

( dpa ) - Computer maker Dell continued to struggle in its fiscal fourth quarter.

The Texas-based company, once the world's largest computer seller, said that earnings dropped to 679 million dollars, or 31 cents a share, from a year-ago profit of 726 million dollars, or 32 cents a share.

But there was some good news as revenue rose 10 per cent to 15.99 billion dollars from 14.47 billion dollars in the year ago period, buoyed by international revenue growth of 16 per cent.

Dell founder and chief executive Michael Dell said that the results reflected Dell's efforts at cost-cutting and revamping its product line, as it tries to regain the top spot from Hewlett- Packard.

The company has reduced its global workforce by roughly 3,200 in the last eight months as part of a restructuring effort that also aims to move Dell from a direct-to-business model to a more traditional consumer retail model.

"While Dell continues to drive towards a world-class cost structure and competitiveness, we have much work to do," said Dell. "Resurgent growth puts us on a strong footing to improve our cost position, scale expenses and enhance productivity across our business. I am confident that from this base we can continue to drive improvements in profitability."

The company said it resumed its buyback programme during the fourth quarter, repurchasing about 179 million common shares for roughly 4 billion dollars. It plans to buy back at least 1 billion dollars worth of common stock in the ongoing first quarter.

Dell said that its sales in Brazil, Russia, India and China collectively grew 36 per cent, and unit shipments increased 50 per cent from the year-ago quarter. In its Asia Pacific and Japan region, revenue grew 28 per cent on a 41-per-cent increase in shipments.

Dell still lags far behind HP in the proportion of its sales derived from international markets - 40 per cent compared to HP's 70 per cent.