Dell Sees Profit Decline by 63%

Dell, one of the leading United States computer companies, saw their profits in the latest quarter decline by 63%. Last year, Dell had a quarterly profit of $784 million. This year, that number dropped all the way to $290.

Despite Dell coming up well short of expectations by most experts, CEO Michael Dell remained positive.

“Signals about the demand environment are mixed, but we’re preparing for what we believe will be a powerful replacement cycle,” said Dell, “with virtualization and managed services playing larger roles in what customers want and Dell provides.”

One of the big problems for Dell is that individuals and companies aren’t buying computers as often. With the current economic downturn, the lifespan of computers are being stretched. For individuals, Dell saw more than a 15% drop in sales. For companies, the drop was more than 30%.

To help stay profitable, Dell has slashed operating expenses. Compared to last year, Dell spent more than $100 million less this past quarter.

Said Dell: “We’re continuing to transform the company on the cost side and delivering strong cash flow. Re-establishing cost leadership and having flexibility to invest in our business will position us well as IT spending improves.”

Dell (Image: Flickr)