Dell Profit Falls as Revenue Grows

Dell posted a decline in profit for its fiscal second quarter even as its revenue grew, while economic doldrums held down its results in some parts of the world.

The company's revenue grew 11 percent in the quarter ended Aug. 1, led by a 28 percent gain in the global consumer business and growth in laptop PCs, which brought in 26 percent more revenue than a year earlier. However, revenue in both those categories was down slightly from the second quarter.

Dell reported net income of US$616 million, down 17 percent from $746 million a year earlier. Earnings per share declined to $0.31 from $0.33.

The huge PC and server maker saw continued economic weakness, particularly in the U.S. and Western Europe, said Brian Gladden, senior vice president and chief financial officer, on a conference call with reporters after the results were announced on Thursday.

Dell used aggressive pricing to gain a stronger foothold in Europe, eating into its margins, Gladden said. But the company continues to reduce its costs and expects to complete its workforce cutbacks in the current quarter, he said.

(More to follow.)