Dell sacrifices profits for market share

Tag : agricultural hardware

Dell shares fell 10 per cent in after-hours trading yesterday as thehardware manufacturer posted a 17 per cent fall in its fiscalsecond-quarter net income from $746m (£408m) to $616m.
The company has been aggressively cutting prices to gain marketshare from rival HP , sacrificing profitability but seeing revenue jump 11 per centfrom $14.7bn to $16.4bn in the same quarter.
Gross profit margin in the period fell to 17.2 per cent from 19.9per cent a year earlier.
"Our growth at a multiple of the industry across all majorproduct categories for the second consecutive quarter affirms weare on track with our five key business priorities –notebooks, consumer, enterprise, SMB and emerging countries,"said chief executive Michael Dell.
Earlier this year the company launched a new line of businesslaptops, including its first ultra-light notebook computers, and arange of lower-price models aimed at the market in developingcountries.
The company has reduced headcount by 8,500 people in the past yearas part of an efficiency drive. It aims to reduce its headcount byanother 400 staff in the third quarter.
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