Dell caution despite profits rise
Friday, 30 November 2007 19:05Computer maker Dell last night reported lower than expected quarterly profit margins and warned that rising costs could depress its future results.
While the world's second-largest personal computer maker earned more revenue than expected and posted 27% profit growth, its shares fell as investors focused on the costs and cautious outlook.
Chief executive Michael Dell, leading a restructuring of the company he founded, spoke of 'winds of caution in certain financial customers' despite good demand overall.
Net profits for Dell's third quarter to November 2 grew to $766m, or 34 cents per share, but gross profit margin slipped to 18.5% from 19.9% the quarter before.
Revenue rose 8.5% to $15.65 billion, topping the average analyst forecast of $15.36 billion, but operating expenses surged 24%.
Dell booked costs of $50m related to job cuts and asset disposals, plus $28m for a year-long accounting audit.
