Dell announced today that its profits in the second quarter of its fiscal year fell 18% from the year before, landing at $732 million and prompting an after hours stock price dip. At the time of this writing, Dell’s stock is down by 4.28% to $11.81 after hours, with the stock finishing the regular trading day at $12.34, only a 1.75% decrease. The Wall Street Journal reports that Dell’s sinking profits come from the computer manufacturer’s struggles with a consumer base that is increasingly opting for mobile devices while they decide to wait on PC purchases.
Revenues were also down in the quarter, slipping 7.5% year-over-year to $14.48 billion. That’s actually a 0.4% increase over the last quarter, but that tiny increase did nothing to impress investors, who were expecting a 2% to 4% increase over the previous quarter. This less-than-stellar second quarter has forced Dell to not only lower its projections for the third quarter, but for the financial year as a whole.
Dell now expects Q3′s profits to come in 2% to 5% lower than originally expected, settling somewhere in the area of $13.7 billion to $14.2 billion. Despite the fact that profits will be lower than expected, that’s still a pretty decent number for the quarter, but the real kicker comes in Dell’s retooled expectations for the whole year. Whereas once the company was projecting that earnings-per-share would be coming in above FY 2012′s $2.13, it now says that it’s expecting an earnings-per-share value of “at least $1.70.”
Overall, Dell’s stock has fallen 18% over the course of the past three months, which isn’t too good. Now the company is gearing up to post lower-than-expected results for the rest of the year, but you never know with these things, especially with the holiday season just around the corner. That holiday shopping season could give Dell’s profits quite a boost, but then again, consumers could just as easily skip the PCs and go with the smartphones and the tablets instead. Stay tuned.
Dell profits tumble by 18% in Q2, stock price dips is written by Eric Abent & originally posted on SlashGear.
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