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Poor Desktop Performance Drag Dell’s Quarter Down To 8%

Wall Street analysts were expecting poor sales performance for Dell and they were not disappointed as the company reported an 8 percent drop off for the second quarter of this year.

The company’s PC and mobile divisions are reporting the biggest contributing loss of 22 percent, while the small and medium sized group for business declaring a 1 percent drop off. Overall, Dell fared best in the United States, with a total of revenues down to 6 percent only. Comparatively, Dell’s revenues in Europe dropped to 7 percent, 15 percent in the emerging BRIC (Brazil, Russia, India, and China) economies, and 12 percent in Japan and other Asian countries.

The upside to the quarterly report is the positive revenue growth of the company’s enterprise solutions and services division showing 6 percent in total revenue. This group is composed of more than 50 percent of Dell’s margin, and more than a third of the overall revenue. Sales from servers and networks is reporting an increase of 14 percent while storage rise up to 6 percent.

According to Brian Gladden, Dell CFO, the performance of the company in the second quarter shows that the company’s long-term strategy is in the right track.

“We continued our progress in shifting the mix of our business to higher-margin enterprise solutions, led by solid growth in our server, networking, services, and Dell IP storage businesses,” Gladden said.

The next quarter will not see any positive overall revenue increase as the company predicts its revenue would fall by another 2-5 percent.

“We’re transforming our business, not for a quarter or a fiscal year, but to deliver differentiated customer value for the long term,” defended Michael Dell, the company’s chairman and CEO.

When the company will experience positive overall revenue growth is still unclear but as far as strategy is concerned, it looks like the company’s management is handling the situation  just fine.

“We’re clear on our strategy and we’re building a leading portfolio of solutions to help our customers achieve their goals,” Dell said.

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