Dell Revenues Flat, Profit Dives in Q2 Earnings Report

By Chris Preimesberger  |  Posted 2013-08-15

Dell, facing increasing pressure from both the markets and its shareholders, moved up its scheduled quarterly earnings disclosure five days to Aug. 15 to report flat year-over-year revenue and a sharp drop in profit.

The Round Rock, Texas-based computer hardware, software and services provider offered no insight because it canceled its regular conference call for analysts and journalists, choosing to post a press release on its Website instead.

In the background, founder Michael Dell and financial backer Silver Lake Partners are offering to buy back the company from shareholders for $13.75 per share, with another 13 cents per share kicking in when the deal is closed, adding another $350 million to the $24.4 billion that was initially proposed. A substantial number of shareholders, including billionaire investor Carl Icahn, are fighting Dell to keep the company public.

"Given the company's announcement on Feb. 5 of a definitive merger agreement to take Dell private, the company is not providing an outlook," the company said in the earnings press release.

Dell reported revenue of $14.5 billion, slightly better than a year ago. However, the company profited $204 million in the previous quarter, compared with $732 million in 2012—a whopping  72 percent drop.

Operating income for the quarter was $272 million. That, too, was down substantially (70 percent) from the $901 million reported in Q2 2012.

Cash flow from operations in the quarter was $1.7 billion. Dell ended the quarter with $13.9 billion in cash and investments.

Division-wise, the best news came from the company's Enterprise Solutions, Services and Software group, whose revenue totaled $5.8 billion and grew 9 percent year over year.

The numbers include sales from the 2012 acquisition of California-based software tools company Quest Software, which since has been rebranded to Dell Software.

Dell's End User Computing reported that its revenue was down 5 percent year over year.


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