Infotech Lead India: Dell’s PCs and laptops are facing slowdown across the world.
Dell on Thursday said its end user computing revenue declined 9 percent to $8.9 billion in the first quarter of fiscal 2014.
The company’s end user computing business mainly includes Dell PCs and laptops. Dell’s operating income in user computing business for the quarter was $224 million, a 65 percent decrease.
In Q4 2012, HP was leading the worldwide PC shipments, according to IDC. HP gained in Asia Pacific and the U.S. HP struggled in EMEA but posted the first year-over-year growth in Asia/Pacific in four quarters. Total volume was nearly flat from a year ago, but better than the overall market.
IDC recently said Dell’s worldwide shipments were down over 20 percent year over year – faster than declines over the past several years – with U.S. volume declining almost as much. The firm did manage sequential growth in most other markets.
Interestingly, Dell’s desktop and thin-client revenue declined 2 percent, mobility revenue declined 16 percent, and software from third parties and peripherals revenue declined 6 percent.
Dell’s total revenue declined 2 percent to $14.1 billion from the previous year. Dell’s net income plummeted 51 percent to $372 million.
Main support came from enterprise solutions group revenue that increased 10 percent to $3.1 billion. Operating income was $136 million, a 71 percent increase.
Dell server and networking revenue increased 16 percent as the company gained share in the calendar first quarter.
Dell networking rose 24 percent, including a 46 percent growth in the company’s Force10 business.
Dell storage revenue declined 10 percent.
Dell Services revenue grew 2 percent to $2.1 billion driven by an 11 percent increase in revenue for infrastructure, cloud and security services. Support and deployment revenue increased 2 percent and applications and business process services declined 15 percent. Operating income was $370 million, a 10 percent increase.
Dell Software revenue was $295 million, resulting in an operating loss. Dell enhanced its software capabilities during the quarter, investing in additional sales capability and research and development. Consistent with the company’s business strategy when it acquired Quest Software, this business is on track to be accretive to earnings in the first quarter of fiscal year 2015.