Dell's 3Q Sales and Profits Fall Flat

Paul Lilly

Dell didn't deliver in the third quarter the way analysts were expecting, instead missing the mark even on modest expectations, Businessweek reports.

According to the OEM's earnings report, sales dropped 15 percent to $12.9 billion. Net income took a bigger hit and fell by 54 percent to $337 million, or 23 cents per share, well below Wall Street's prediction that Dell would earn 28 cents per share on sales of $13.1 billion.

The poor performance affected just about every aspect of Dell's businesses, but sales to large businesses were hit particularly hard. That's bad news when close to 80 percent of Dell's sales are businesses and government customers.

Even the launch of Windows 7 didn't do much to bolster sales, at least not yet. According to company CFO Brian Gladden, customers had put off purchasing a PC in the weeks leading up to Windows 7, and Dell's quarter ended just eight days after launch.

"We built a bit of a backlog as a result, and we'll ship through that in the fourth quarter," Gladden said.

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