That sounds rather dramatic, but in reality the company is still worth a heap. Total revenues for fiscal Q1 2014 were $14.1 billion.
In a prepared statement, Dell CFO Brian Gladden said the company had made progress in building its enterprise offerings and is “confident in our strategy to be the leading provider of end-to-end scalable solutions”. Additionally, Gladden said the company has been taking actions to improve Dell’s competitive position. “We’ll also continue to make important investments to support our strategy and drive long-term profitability” – more shopping?
Enterprise Solutions Group had revenues of $3.1 billion, a ten percent increase on the previous quarter, with a 71 percent boost in operating income at $136 million. Dell Services enjoyed two percent growth to $2.1 billion and an 11 percent increase in revenues from infrastructure, cloud and security services. Support and deployment also grew two percent, but applications and business process services dropped 15 percent. Operating income grew 10 percent to reach $370 million.
Dell software saw an operating loss on the back of $295 million in revenues. However, Dell believes this segment is “on track to be accretive” to earnings for Q1 fiscal 2015. End user computing declined nine percent, with revenues at $8.9 billion for the quarter. Desktop and thin client revenues dropped two percent, mobility declined 16 percent, and software from third parties and peripherals declined six percent.
PC sales plunged nine percent but in fairness, this is expected. The entire world is in a slump and, although Dell offers some kit at the low end of the market, no one’s really buying.
However, Dell did point out that new technologies revenues as well as services and software gained a 12 percent boost, to reach $5.5 billion.
Tin-box enterprise supremo and founder Michael Dell really wants to gain a majority share in the company so he can take it off the public market and shift it in a new direction – some whispers suggest the way of IBM, discarding a burdensome consumer unit and focusing fully on enterprise, services and related businesses. Michael Dell’s proposed buy-out, along with Silver Lake, is just short of $25 billion.
Shareholders Carl Icahn and Southeastern Asset Management are trying to wrangle the company back from Mike and Silver Lake’s grip, insisting that the valuation is peanuts and investors should get much more for their buck. They are making their own proposals for the company, in a power struggle which has been ongoing for months.
Dell did not issue a company outlook, citing the announcement for a merger agreement to take Dell private as the reason.