Dell Finds the Business of Slinging PCs "Challenging" as Profits Slip 18 Percent

Paul Lilly

There was a time when PCs practically sold themselves, but that was before everyone started crowing about the tough economic landscape and other factors that, as Dell explains, makes growing a PC business "challenging," a word the OEM used when describing its second quarter financial results. Amid slumping sales and declining profits, Dell said it's in the process of transforming its business with a clear strategy focused on long-term results.

"We’re transforming our business, not for a quarter or a fiscal year, but to deliver differentiated customer value for the long term," said Michael Dell , chairman and CEO. "We’re clear on our strategy and we’re building a leading portfolio of solutions to help our customers achieve their goals."

Company CFO Brian Gladden elaborated a bit on Dell's strategy, which includes shifting its focus to enterprise solutions where the profit margins are higher.

"Growth in our PC business was challenging, as we saw a tough macroeconomic and competitive environment, and continued to focus on higher value solutions in this business," Gladden said.

All that said, it's not as though Dell is hemorrhaging cash or calling for someone to stick a fork in the company. Dell reported revenue of $14.5 billion with $875 million in profits during the second quarter, they just happen to represent double digit declines of 8 percent and 13 percent, respectively, compared to last year.

Going forward, Dell said it expects Q3 revenue to drop another 2-5 percent from Q2.

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