IT Slowdown Hits Dell's Revenue, Net Profit

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Dell's revenue and net income dropped in its third quarter as the company tries to cope with a global IT spending slowdown and less demand for its products.

Revenue for the quarter that ended Oct. 31 was US$15.16 billion, a 3 percent drop compared to the third quarter of last year, and short of the $16.2 billion estimated by analysts polled by Thomson Reuters. Earnings per share were $0.37, besting analyst estimates of $0.31.

Net income dropped 5 percent to $727 million, but beat analyst estimates of $616 million.

Dell's consumer business had 10 percent revenue growth globally, while the commercial business had a revenue decline in the Americas and EMEA (Europe, Middle East and Africa) of 8 percent and 5 percent, respectively. Commercial laptop shipments had flat growth year-over-year, while server shipments dropped by 4 percent. Commercial revenue grew by only 2 percent in the Asia-Pacific and Japan region.

The global IT environment will continue to be challenging and Dell will try to adapt, the company said in a statement.

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