Dell Profit Down 63%

Company looks forward to a 'powerful replacement cycle' says CEO

Saying it will continue to keep a close eye on costs in a "still challenging" environment, Dell posted a 63% decline in quarterly net profit on May 28. Profit fell to $290 million in the first quarter of its fiscal year from $784 million in the same quarter a year ago.

Revenue declined 23% during the February-April period to $12.3 billion.

"We're continuing to transform the company on the cost side and delivering strong cash flow," CEO Michael Dell said. "Re-establishing cost leadership and having flexibility to invest in our business will position us well as IT spending improves."

"Signals about the demand environment are mixed, but we're preparing for what we believe will be a powerful replacement cycle," he added.

Chief financial officer Brian Gladden said the company had "maintained solid operating margins and made further progress toward reducing annualized costs by four billion dollars by the end of fiscal 2011."

Dell did not provide an outlook for the current quarter but said "indicators of global IT demand remain mixed, and the broader environment is still challenging."

Dell last month closed a factory in Ireland and moved it to Poland.

Copyright Agence France-Presse, 2009

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