Dell Posts 63 Percent Decline in Profit

Summary: Computer giant Dell said its March to May earnings plummeted to $290 million from $784 million compared to last year. With this result, it has been estimated that its shares fell 15 cents to 38 cents in 2008.

Meanwhile, Chief Executive Michael Dell remain optimistic and said that computer sales will increase next year as business giants are expected to replace its old computers.

Computer giant Dell Inc. on Thursday said its profit fell by 63 percent during its fiscal first-quarter due to weak demand on PC as consumers remain weary to spend their money on buying new desktops and laptops.

Dell said its March to May earnings plummeted to $290 million from $784 million compared to last year. With this result, it has been estimated that its shares fell 15 cents to 38 cents in 2008.

In a conference meeting, Dell Chief Financial Officer Brian Gladden said that the company expects that sales and demand will improve next year when most analysts have predicted that this will be the period of economic recovery

Dell reported that its sales of laptops and netbooks fell by 20 percent in the first-quarter despite some attempts to lower its price up to 8 percent to lure consumers to buy its mobile computers.

The computer giant said that in the US, which accounted for more than 50 percent of sales, its revenue declined by 21 percent. However, the result was worse in Europe, Africa, and Middle East combined, with nearly 30 percent decline in PC sales, Dell added.

Meanwhile, the slumping sales is not a surprising result to analysts who said that global consumer sales fell 16 percent, affecting most economic sectors regardless of its business-scale.

Despite gloomy sales result, Chief Executive Michael Dell said computer sales will increase next year as business giants are expected to replace its old computers following the release of Microsoft Windows 7 operating system.