PC MAKER and takeover target Dell slid further away from prosperity yesterday after a downturn in computer sales halved quarterly profits.
The Texas-based manufacturer said revenues from the sale of desktop PCs, tablets, and third party software slumped nine per cent to $8.9bn (£5.83bn) for the first quarter ending 3 May, on weak demand.
“We have taken actions to improve our competitive position in key areas of the business, especially in end-user computing, and it has affected profitability,” Dell chief financial officer Brian Gladden said.
Total revenue fell two per cent to $14.1bn, fostering a 51 per cent slide in net income excluding certain items to $372m.
The sales fall will add weight to chief executive Michael Dell’s argument that the company needs to turn away from its traditional PC business into a higher-margin software company, a move that has paid off for IBM.
Michael Dell wants to take the company private since he feels it will be much easier to pivot the business, which he founded in 1984, away from the glare of Wall Street and the need to give quarterly sales figures.
Michael Dell is currently battling with activist investor Carl Icahn over the future of the company.
The founder wants to take it private in a $24.4bn deal, while Icahn, a big shareholder, has dubbed the proposal an insult to shareholders.
Icahn has proposed a different deal that would allow shareholders to retain their stake in Dell if they desire.
Shares in Dell stayed flat in after-hours trade late last night, at $13.44, after closing at $13.43.
Michael Bow, James Titcomb