Dell profit up 46 percent due to cheaper components

Just two weeks after revealing that some employees had falsified corporate revenue to meet earnings targets, Dell reported a profit of $733 million for its fiscal 2008 second quarter, up 46 percent from its mark of $502 million for the same period last year. The strong result was driven by sales to enterprise customers, an increase in the selling prices of Dell PCs, and a drop in component costs, the company said.

Dell recorded revenue of $14.8 billion for the quarter ending Aug. 3, generating earnings of $0.32 per share. Both figures were above Wall Street expectations of $14.63 billion revenue and $0.30 earnings per share, according to analysts surveyed by Thomson Financial. However, Dell warned investors to be cautious when comparing the figures to past quarters because the company plans to restate its earnings for the past four years. Dell plans to revise its quarterly and annual financial statements for fiscal 2003, 2004, 2005, 2006, and the first quarter of 2007.

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News source: InfoWorld

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10 Comments

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0x00000001 said,
Del.... .. ,, i would pay just the crazy over charged price to NOT have "a dell"

What should I pay you to resist from posting irrelevant replies?

Dell guy #1 - "Wow, looks like components costs are going down"
Dell guy #2 - "Sweet, our customers will be happy to have lower prices"
Dell guy #1 - "What? We don't need to lower prices"
Dell guy #2 - "You are right! Lets keep charging $270 to go from 2 GB to 4 GB of ram"
Dell guy #1 - "Exactly, more profits for us!"

Which is still an improvement over Apple, who charge $850 for a 1g - 4g upgrade on the iMac. Or, by going along with your scenario, $600 to go from 2g - 4g.

What company doesn't overcharge for simple upgrades that could be gotten cheaper elsewhere? And please, no one give me the excuse that Apple uses 'special' ram, which I've heard before.

phantasmorph said,
Which is still an improvement over Apple, who charge $850 for a 1g - 4g upgrade on the iMac. Or, by going along with your scenario, $600 to go from 2g - 4g.

What company doesn't overcharge for simple upgrades that could be gotten cheaper elsewhere? And please, no one give me the excuse that Apple uses 'special' ram, which I've heard before.

Excuse me, but Apple DOES USE special RAM. It helps keep the reality distortion field stable.

Doubt it. Most of the profit is coming from ripping off customers. $200 2GB ram upgrades, $120 CPU upgrades $100 Video Card upgrades - all of which would cost 1/2-1/3 if bought on newegg (in compared to the original component - ie Processor upgrade isnt $280 for a q6600 from a e4400 - more like $130.

But those prices are typically made up with coupons. The final price is usually around the same as you would pay buying individual components from newegg or the like. The difference is that Dell often gives you shoddy parts.