Dell posts Q2 earnings, sees 72% decline in profits

Dell has posted its financial results for the quarter that just ended and the company seems to have been struggling amid a general market decline in PC sales and the battle that’s being fought inside Dell itself.

The giant computer company has posted profits of only $204 million, and while that may seem like a large number we must keep in mind that this is down from $732 million just one year ago. Despite this 72% reduction in profits the company’s revenue was flat year over year staying constant at $14.5 billion.

This apparent good news is mainly due to an 8% increase in revenue for its Enterprise Solutions Group as well as a 10 percent increase in revenue for its server, networking and peripherals division. The bottom line leaves Dell with $13.9 billion in cash and investments.

Dell is currently in the middle of a battle that’s going on inside its ranks. Company founder Michael Dell, alongside equity firm Silver Lake and with support from Microsoft, is trying to take the company private. But so far his efforts have been futile thanks to rival Carl Icahn that believe Dell is undervaluing his own company. A vote on an updated offer is set to take place on September 12th.

In light of this, the company has declined to give an earning guidance outlook for its next quarter.

Source: Dell | Image via Dell

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i'm sure it's unintentional that 72% decline in profit just so happens to coincide with dell going private. but what do i know.

They went from "Dude you got a Dell!!!!" to "Dude.. you got a Dell???"

Their consumer products have simply went in the toilet, and their enterprise stuff isn't all that great either. We recently switched from Dell servers to HP offerings and the difference in performance is mind blowing. When we were getting to migrate to newer hardware and getting quotes from our reps, HP's pricing was also more than 20% less for better hardware than Dell offered.

I have a brand spanking new Inspiron here on my desk that I wouldn't use to prop up an unbalanced table. The quality is that crappy.

I went to by a new Dell laptop last month, so got Apple MacBook Air 2013

It is very simple, I went to the Dell store online and they had tons and tons of choices, good machines and bad machines, all presented as the latest and greatest.

I went to the apple store in the mall and they had the small and very light one, and the a bit heavier and more powerful one, and that's it.

I did not had to go through tons of reviews and investigations to figure out if the CPU was ok, or the SSD was ok, or the drivers were ok, or the board was ok, or the ….. ; the dell machine is cheaper because some of the components are less quality, then when you pay more they give you a better Dell with better components.

I did not want that, I want to use my time to do something else, so I got the best machine that runs Windows 8, Photoshop CS6, VS.NET 2013 and Microsoft Office 2013; it is MacBook Air 2013, everything there just fly.

Sorry Dell, let me know when you start taking care of your products and stop confusing consumers.

ahhell said,
So Dell offering numerous models and options is a BAD thing?

Only on Neowin.

There can be a stage, where too many options can be a bad thing. When joe public goes to the dell site, it's VERY complicated

If you weren't so lazy, you could have got a ultrabook just as good for a third the price. You are the quintessential example of the Apple tax.

Dashel said,
If you weren't so lazy, you could have got a ultrabook just as good for a third the price. You are the quintessential example of the Apple tax.

I am a software developer, and I love to compare hardware sometimes, but even I don't have the time to keep comparing, why not the company to compare for me?

Apple Tax? Yeh right!

Anyway, 2 days after I got the MacBook Air a friend asked me to help him choose an ultrabook, and I had to compare things again, and here is what I got:

The MacBook Air with 4th Gen Intel Core i5 with 4GB Ram with 128GB SSD, with very slim design, with very fast internals, with a very good screen, and with end to end functioning drivers for Windows 8, and 3 years warranty and taxes cost me 1300$

Every other ultrabook had Generation 3 Intel processor, big thumbs down
- MacBook air 13 inch had 10 hours of battery life, tested by people on the internet, big plus.
- I have an apple store next to me, big plus, I can see the product and test it as I want.
- And drivers, all the windows drivers right there always updated with every new windows release? Wow, I have a dell laptop at work Core i7 that is upgraded to Windows 8 and the keyboard brightness buttons stopped working, I had an Asus laptop upgraded to 8 and other things stopped working.

You can go this way and make a long list of things that make Apple better, they may not have a good os, but man, they understand hardware.

All that with everything for 1300? Apple Tax, the equivalent XPS at dell with everything is more than 1500$

Now where was the cost of your Win8 license in that figure? There are many excellent ultrabooks in the $400-800 range that will serve most users just fine. Justify all you want, for what you spent on the Air, you could have bought an ultrabook, a Surface, a new WP and still had money left over.

And thats with a fraking touch screen.

Edited by Dashel, Aug 16 2013, 5:01pm :

Dashel said,
Now where was the cost of your Win8 license in that figure? There are many excellent ultrabooks in the $400-800 range that will serve most users just fine. Justify all you want, for what you spent on the Air, you could have bought an ultrabook, a Surface, a new WP and still had money left over.

And thats with a fraking touch screen.

yeh, keep dreaming

I am one of the first to get a touch screen, I got one of the first 23 inch touch screens back for Windows 7 and I got disappointed long ago, don't worry, you are next, but until then, keep the propaganda


here is the closest thing dell has to MacBook Air 2013
http://www.dell.com/ca/p/xps-1...s=cadhs1&l=en&s=dhs

it is still slower, shorter battery life, thinker, slower graphics, slower ssd, etc | final with taxes still more expensive that MacBook Air + a Windows 8 license

Dashel said,
Now where was the cost of your Win8 license in that figure? There are many excellent ultrabooks in the $400-800 range that will serve most users just fine. Justify all you want, for what you spent on the Air, you could have bought an ultrabook, a Surface, a new WP and still had money left over.

And thats with a fraking touch screen.


Dell calls this think, bulky machine Ultrabook
http://www.dell.com/ca/p/inspi...s=cadhs1&l=en&s=dhs

Good, I will also start calling yellow objects GOLD good for me

Holy... wow

Dell's truly in the bull's eye for feeling the effects of the freezing PC market.

(this of course has nothing to do with Dell's support or hardware quality -- while average at best, that didn't change whatsoever in the last few quarters)

Northgrove said,
Holy... wow

Dell's truly in the bull's eye for feeling the effects of the freezing PC market.

(this of course has nothing to do with Dell's support or hardware quality -- while average at best, that didn't change whatsoever in the last few quarters)

You're seriously saying dells support hasn't improved over the last few months? Really? What negative experiences have you had?

I would agree with that for their consumer range. Dell's business range (Vostro, Optiplex, Precision, Latitude, etc.) are still great machines (from my opinion).

What disappointing me the most is the thickness/bulkiness of their consumer laptops (Inspiron series), and their piano finishes.

I'd blame it on computers becoming too powerful. I would expect a quad-core hyper-threading i7 with 16GB of RAM and 4TB storage drive (or two) to last me well into the future. From a corporate point of view, this increase in power would probably mean most companies wouldn't have to upgrade their computers anywhere near as often (which isn't good news for hardware vendors). If you're working in media then yes, it would make sense to upgrade more frequently. But for the admin assistant, I presume their Core 2/i7 would still handle Office 2019 in the future.

What I expect to see is a whole lot of SFF PCs similar to the Mac Mini replacing ATX cases on desks.

Edited by 68k, Aug 16 2013, 12:20pm :

The computers are not powerful enough, the software just did not change much, Microsoft is still making the same Windows over 20 years and keeps selling it as a new thing.

If these 20 years were spent to use the hardware and make it understand you better, communicate with you, or present you your work better, then everyone would have upgraded their hardware to use the new software.

Tomb Raider or Call of Duty or …. Tons of 3D games have full worlds inside of them, a full and rich 3d worlds, and businesses still build basic 2 dimensional apps for business, and now with Metro things are about to get way more basic, one app full screen.

There are tons of software to be made, and there are tons of hardware to be made for that software, just no one is making it.

My house does not know who am I, it can't call 911 in case of emergency, my fridge does not know what is inside it, I forgot if there is milk in the fridge and if I should buy it today or tomorrow, my kitchen does not clean itself, my house does not clean itself, nothing organizes itself, my card does not drive me to work, my TV does not understand me or my mood, and not able to display things that I want when I want, etc etc etc

There are a million things missing, and for the last 20 years 10,000 people at Microsoft are working to style a Window, wow, good job, well done, they destroyed the hardware industry.

john.smith_2084 said,
Microsoft is still making the same Windows over 20 years and keeps selling it as a new thing.

john.smith_2084 said,
for the last 20 years 10,000 people at Microsoft are working to style a Window, wow, good job

So you're saying basically that between Windows 3.1 (20 years ago) and Windows 7 or 8 nothing has changed but a visual style? Ummm have you actually used Windows at all in that time frame?

john.smith_2084 said,
My house does not know who am I, it can't call 911 in case of emergency, my fridge does not know what is inside it, I forgot if there is milk in the fridge and if I should buy it today or tomorrow, my kitchen does not clean itself, my house does not clean itself, nothing organizes itself, my card does not drive me to work, my TV does not understand me or my mood, and not able to display things that I want when I want, etc etc etc

A lot of that stuff is available now. Not sure what the point of this is though, considering Microsoft doesn't build refrigerators or cars.

Max Norris said,

So you're saying basically that between Windows 3.1 (20 years ago) and Windows 7 or 8 nothing has changed but a visual style? Ummm have you actually used Windows at all in that time frame?.

Absolutely, a looooot happened, yeh right, a propaganda is propaganda, but at the end, if you opened Windows 3.1, and Windows 8, both have the same file manager, the same paint, the same ....

Windows 8 have a long start screen, Windows 3.11 had a program manager

john.smith_2084 said,
Absolutely, a looooot happened, yeh right, a propaganda is propaganda, but at the end, if you opened Windows 3.1, and Windows 8, both have the same file manager, the same paint, the same ....

Oh my. Get back to me when you've actually tried both versions, you're clearly talking out of your ass here if you honestly believe something like that. Don't forget to explain how nothing has changed between versions of the various Linux desktops or say Apples over the past 20 years too.

Dells customer service used to be pretty bad. However, I have received fantastic support over the last couple of months. Perhaps they have pulled their finger out.

Really'? My experience has been the opposite. Great Service until 2-3 years ago. Now it has been flat awful. Took me, 4 days to get 2 new server and 8 all in one units ordered last week.

That's a bit of headline misrepresentation as it makes it sounds like there's a huge drop in sales when there isn't. It's the old percentage change of a percentage trick. The problem here is they're unable to make as much money on the sales which is happening industry wide. Margins just keep getting smaller and smaller. I wouldn't invest in any company that depends heavily on hardware sales these days.

The quality of their consumer line has gone way down, thats part of the problem. Just look at the reviews for their stuff on their Facebook page, its pretty much all about how crappy their computers are and how bad their customer support is. What Dells needs to do is stop making cheap stuff and focus back on being a premium brand with premium support and yes that means US based support for those of us in the states.

They've always made mostly cheap junk for as long as I can remember. Some of their XPS PCs were decent, but you had to pay a premium for them. Otherwise the rest have been cheap plastic with crappy batteries (in the laptops) and crappy power supplies.

They constantly rank towards the bottom of the PC ranking lists year after year.

You can buy an HP, Lenovo, or Asus for the same prices and the quality is much much higher. Dell and Acer are the two brands I always stay away from.

They do make really cool and innovative consumer products though. I love the XPS 18, the XPS 12 which they upgraded to Haswell, and the upcoming XPS 11 with the flat keyboard. Very innovative convertibles coming out of Dell.

Innovative definitely isn't the right word. They basically just copied pieces from the Surface tablet and Lenovo Yoga and combined it into one. And since it's an XPS, it will be overly expensive. It looks nice and all, but they'll price themselves out of success.

before anyone starts shooting their mouths off......remember dell also caters for both consumers AND enterprise!

Their enterprise products seem pretty good, BUT, as most people who work in IT know....there will come a time when certain things will be hosted in the cloud. Third party solutions are the first to go, then the bigger products. We ourselves have just moved to Lync online and will probably migrate our phone system using sip trunks into the lync solution. Saves thousands of pounds a year and means we don't have to worry about server uptime, power, upgrades etc etc......this is governed all via our SLA agreement.

What does that mean for dell.....well we won't be buying their servers for a start

from a consumer perspective......people are using phones and tablets a lot more which is why many people are not considering a desktop upgrade. Dell AFAIK, don't do phones anymore (could be wrong) but they do make tablets.

I've owned the xps 10 and latitude 10. Both great devices, but unfortunately it's the whole windows 8 ecosystem. Not dells fault, but I can see why the fall in profits.

I think the next five years are going to be very interesting

glen8 said,
before anyone starts shooting their mouths off......remember dell also caters for both consumers AND enterprise!

Their enterprise products seem pretty good, BUT, as most people who work in IT know....there will come a time when certain things will be hosted in the cloud. Third party solutions are the first to go, then the bigger products. We ourselves have just moved to Lync online and will probably migrate our phone system using sip trunks into the lync solution. Saves thousands of pounds a year and means we don't have to worry about server uptime, power, upgrades etc etc......this is governed all via our SLA agreement.

What does that mean for dell.....well we won't be buying their servers for a start

from a consumer perspective......people are using phones and tablets a lot more which is why many people are not considering a desktop upgrade. Dell AFAIK, don't do phones anymore (could be wrong) but they do make tablets.

I've owned the xps 10 and latitude 10. Both great devices, but unfortunately it's the whole windows 8 ecosystem. Not dells fault, but I can see why the fall in profits.

I think the next five years are going to be very interesting

My company switched from Dell to HP servers and its been quite awesome. Much better hardware prices and flexibility.