Monday, August 21, 2006

Trouble comes in threes for Dell

Dell results down 50% from Q2 '05, and the SEC continues to investigate how Dell books their revenue. The Good News: they seem to have fixed the problem with their exploding laptop batteries (maybe)

http://twice.com/article/CA6364096.html

http://www.nytimes.com/2006/08/18/business/18dell.html?_r=1&dlbk&oref=slogin

http://news.morningstar.com/news/DJ/M08/D18/200608180420DOWJONESDJONLINE000376.html?pgid=wwhome1d

Asked how demand for personal computers was shaping up in the third quarter, Dell said demand is "OK," without elaborating further.
Dell, who is also the computer maker's founder, blamed "aggressive pricing pressures" in the second quarter for its tepid second-quarter earnings results.
Thursday, Dell said its second-quarter net profit was down almost 50% to $502 million, or 22 cents a share, on revenue of $14.09 billion.
He said the company will "adjust its pricing strategy," without providing more specific details.
Steve Felice, president of Dell's Asia-Pacific operations, said separately in an earlier conference call Friday that the computer maker lowered prices "more than necessary."


Ah, the bold "we'll slash our margins to grow revenue, and make it up on volume" strategy. I never get tired of hearing that one, and am keen to see someone apply that maxim and make it pay off. I suspect I will have to continue to wait.

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