Dell fails to impress despite record financial year


Dell fails to impress despite record financial year

Warwick Ashford

Dell has claimed its most successful financial year ever, but failed to impress investors by missing fourth quarter profit expectations.

While the expanding enterprise systems and services took Dell to record revenues of $62.1bn that were 1% up on the previous year, disruptions caused by floods in Thailand hit fourth quarter profits, despite a revenue increase of 2% to $16bn compared with the same period the year before.

Dell shares dropped 5% on the news in after-hours trading, according to the Financial Times.

Fourth quarters sales were up 2% to $16bn compared with the same period the year before, but Dell reported a 10% drop in profit to $1bn which was below Wall Street's expectations.

For the full year ended February 3, Dell reported  of $3.9bn profit, up 27% compared with the previous year. Revenue from enterprise solutions and services was $18.6bn.

 “The expanding mix of revenue and earnings from enterprise solutions and services is critical to our future,” said Brian Gladden, Dell chief financial officer. “Our full-year results are a strong reflection of the significant progress we made this year on our strategic priorities.”

The latest results from Dell reflect the company's strategy to move away from lower-cost consumer PCs to higher-margin corporate hardware, software and services, which now account for around 30% of revenue and 50% of gross profit.

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