Dell Computer and Hewlett Packard (HP) both failed to bring news of an end to the PC depression when they published quarterly results yesterday.
Dell reported sales this quarter of $7.61bn, down 0.8 per cent from $7.67bn last year. The company reported a second-quarter net profit of $433m, or 16 cents per share, meeting Wall Street targets. In the same period a year ago, profit was $603m, or 22 cents a share.
If charges of $742m arising from layoffs, facilities closures and other cost-cutting measures were included Dell would have reported its first loss since 1993.
In a conference call on Thursday, chief executive Michael Dell summed up the malaise. "What we have seen is a delay in company spending pushed on heavily by the economy as well as a reduction in spending by the dotcoms and telecoms companies," he said.
Dell did report that international sales were holding up better than in the US and that they were more profitable as the price war instigated in the US hasn't spread internationally.
Going forward, Dell said that he thought Windows XP and the Pentium 4 processor would be a catalyst for sales during the remainder of this year, but he did not see any real rebound until next year.
The picture for HP was not much better, although chief executive Carly Fiorina did say that revenues would go up in the next quarter compared with this one. "We don't see any signs of improvement in the market before 2002," she said.
The company reported third-quarter sales of $10.1bn, down 14 per cent compared to $11.8bn in 2000. Profits were $111m, or six cents a share, down 89 per cent from $1bn, or 51 cents a share, last year.
Although consumer sales dropped 21 per cent in the quarter, Fiorina stressed that HP was committed to the consumer PC market. Analysts, however, have said that the company should exit the market.
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