Dell says demand for products is stabilizing

But the company expects gross margins to dip on higher component costs and a competitive pricing environment

Dell said on Monday that demand for its products is "stabilizing" and that it expects to report a sequential increase in revenue for its second fiscal quarter, which ends July 31.

The computer maker also expects a "modest decline" in gross margins, however, due to higher component costs and a competitive pricing environment, Chief Financial Officer Brian Gladden said in a statement. Gross margins provide a measure of how profitable a company is after its costs of doing business.

Demand for Dell's products and services seems to have stabilized from this time last year, the company said, but the demand varies significantly by customer segment and geography.

"We continue to believe that customers are deferring IT purchases, and that we will see demand return to more typical levels at some point," Gladden said in the statement.

Dell's shares on the Nasdaq fell about 4 percent in after-hours trading, to $12.55.

The announcement came ahead of Dell's analyst conference to be held on Tuesday in Austin, Texas.

Dell's revenue has declined sequentially for each of the last three quarters amid the worldwide recession.

Its revenue in the first quarter fell to US$12.3 billion, a 23 percent drop from the same period a year earlier. Net income fell to $290 million from $784 million on lower PC sales and restructuring charges.

Dell remains focused on cutting costs in a "still-challenging operating environment," Gladden said on Monday. Dell has said it wants to reduce its annual costs by around $4 billion by the end of fiscal 2011.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Dellglobal financial crisis

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?