Dell's PC Business Is Steady; Company Sees Demand Uncertain

Dell reported growth in net income and revenue for its second fiscal quarter, although consumer revenue fell sequentially.

Dell reported a 1 percent year-over-year growth in mobility products, including notebooks, and a a 3 percent drop in desktop PCs. Overall, however, Dell claimed that revenue for client products – desktop and laptop computers – was up sequentially 6 percent to $8.5 billion.

In total, Dell reported net income of $890 million on revenue of $15.7 billion, a 60 percent boost in profits and a 1 percent increase in revenue.

Consumer revenue was $2.9 billion, a 1 percent increase from a year ago, Dell said. Dell's small and medium business segment reportred a 5 percent oincreae in revenue to $3.7 billion. Dell's Public segment grew 10.9 percent to $484 million, while Large Enterprise recorded 1 percent revenue growth from a year ago, to $4.6 billion.

Dell focused mostly on its enterprise businesses, although the majority of its revenue, or 55 percent, derives from the sale of desktop PCs and mobility products. Dell said that its consumer business reported consolidated operating income of $73 million, while its SMB segment reported net income of $404 million. Its large enterprise and public sectors, however, were the most profitable, pulling in net income of $448 million and $484 million, respectively.

"We continue to see great momentum in the high-growth areas of our business, which is a direct reflection of the discipline and strong execution our global Dell team is applying to help solve real-world challenges for our customers," Michael Dell, chairman and chief financial officer, said in a statement. "We're creating efficiency across every step of the IT value chain and ultimately enabling all customers—from home users to large businesses and government organizations—to achieve the outcomes that matter most to them."

In the third quarter, Dell said it expects to see revenue roughly flat relative to Q2, which is in line with seasonality over the past two years, Dell said. The company also raised its net-income expectations for the 2012 fiscal year by 17 percent to 23 percent, but lowered expected revenue from 5 percent to 9 percent to 1 percent to 5 percent.

Dell lowered its revenue forecast due to a more uncertain demand environment and a shift to higher-value solutions, it said.

Source:http://www.pcmag.com/article2/0,2817,2391227,00.asp?kc=PCRSS05039TX1K0000760