Dell profit and revenues shrink, and so does its outlook

The company warned that sales in the August-October quarter will continue declining on a sequential basis. CEO Dell says the company is "transforming" its business.

Dell again posted disappointing earnings, and its shares declined 3.5 percent in after-hours trading.

The company's sales and net income both shrank in the May-July quarter compared to a year earlier. Revenue fell eight percent to $14.5 billion, while net income dropped 18 percent to $732 million. Dell blamed the decline on a contraction in desktop and mobility revenue.

The company's adjusted profit did exceed analyst expectations, though revenue fell short. Dell reported per-share earnings of 50 cents on the adjusted basis beloved by Wall Street. The consensus estimate compiled by First Call was for per-share earnings of 45 cents on $14.7 billion in sales.

Dell also said that it now expects revenue in the August-October quarter to edge downward another two to five percent compared to the immediately preceding quarter. At the same time, Dell adjusted its full-year earnings outlook "to at least $1.70 a share." Wall Street had expected full-year profit of $1.90 a share

"We're transforming our business, not for a quarter or a fiscal year, but to deliver differentiated customer value for the long term," said Michael Dell, chairman and CEO in a statement. "We're clear on our strategy and we're building a leading portfolio of solutions to help our customers achieve their goals."

More to come.

Corrected at 1:40 p.m. PT:Dell's quarterly earnings actually beat analyst expectations in the May-July quarter. An earlier version of this story incorrectly described its report as an earnings miss.

Featured Video
This content is rated TV-MA, and is for viewers 18 years or older. Are you of age?
Sorry, you are not old enough to view this content.

Microsoft leaves Apple in the dust with tablet and laptop innovation in 2015

Will there be one Apple Ring to rule them all? That's what a patent application says. Plus, building the thinnest gadget isn't innovation anymore and Apple just got a reality check from Microsoft.

by Brian Tong