Dell profits off 28 per cent

Nov 11, 2005, 4:03 GMT

New York - The world's largest computer maker, Dell Inc., reported Thursday that third-quarter profits were down 28 per cent from a year ago as rivals ate into its sales of low-end computers.

The company, based in Round Rock, Texas, said that net income fell to 606 million dollars, or 25 cents a share, from 846 million dollars, or 33 cents, a year earlier.

Dell said that sales rose 11 per cent to 13.9 billion dollars, the sixth straight quarter that the company has seen the pace of sales slow.

The company forecast fourth-quarter profit of 40-42 cents a share on sales of 14.6 billion to 15 billion dollars, which was at the low end of analysts' expectations.

The disappointing results are a boon to competitors like Hewlett Packard, which has seen its growth quicken with sales of low-end computers, just as Dell's focus on more expensive systems is slowing its sales growth.

Among the bright spots in Dell's report were storage sales growth of 35 per cent and server sales growth of 16 per cent. Services revenues grew 36 per cent, while notebook sales jumped 14 per cent to 3.6 billion dollars.

In a statement, Dell chief executive Kevin Rollins said that Dell has made recent moves to further streamline several parts of its business.

'We're always looking for better ways to improve the efficiencies of our business,' he said. 'Customers in every major market of the world are significantly and increasingly choosing to do business directly with Dell, so we are able to make these changes from a position of strength.'