Dell announced a 5 percent decline in net income and a 3 percent drop in revenue for its fiscal third quarter. The Round Rock PC maker says almost all of the businesses they are in are slowing, but the firm was able to beat Wall Street expectations by cutting costs, buying back shares and boosting profit margins. WSJ reports:
The revenue decline -- Dell's first year-over-year drop since the beginning of 2007 -- wasn't a surprise. In September, the company said it was seeing weakness in corporate PC spending. Still, Dell's revenue missed a consensus of analyst estimates by about $1 billion.
"Cost cutting efforts helped offset falling revenue growth," said Bill Kreher, an analyst at Edward Jones. One troubling sign, he added, was Dell's revenue in laptop computers, which grew less than 3%; he said laptop growth was expected to be more robust.
But after weeks of lowered expectations and bearish projections, Dell cleared a low bar: Its earnings beat subdued Wall Street forecasts, thanks to cost cuts and share buybacks. That sent Dell's shares up 5% in late trading to $10.30, after closing down 5% in 4 p.m. trading on the Nasdaq Stock Market.