Dell feels the pinch in Q4

PC behemoth ramps up cost cutting as revenues ebb away

An operational cost-cutting drive helped PC giant Dell ride out a wobbly closing quarter to its fiscal year as full-year revenue remained flat.

Dell's fiscal year 2009 closed on 30 January. Worldwide revenue for the three months to that date plummeted 16 per cent year-on-year to $13.4bn. (£9.4bn).

Q4 net profit slumped 48 per cent to $351m, while the full-year figure was down 16 per cent to $2.5bn. Revenue for the entire year remained flat on 2008 and stood at $61.1bn.

Dell claimed that the results represented a solid showing and drew attention to the fact that the year's closing quarter saw a year-on-year reduction of 16 per in operating expenses. In March, the company unveiled plans to reduce costs by $3bn over the next two years and that figure has now been upped by $1bn.

Helping to drive the reduction in cost base is Dell's reorganisation into four business units: Large Enterprise; Public; Small and Medium Business and Consumer. Dell's commercial business fell back across the globe last quarter, with a 17 per cent revenue decline in the Americas.

EMEA commercial revenue declined 17 per cent, while in Asia-Pacific and Japan the figure was 24 per cent. Consumer revenues were less badly affected, falling back seven per cent globally.

Chief executing Michael Dell said: "Customers know they need information technology, and we think we are best able to help them use IT to improve productivity. But a lot of IT spending is being deferred until there is better economic visibility.

"Within our business, we are being very disciplined in managing costs, generating profitability and cash flow and investing in ways that separate Dell from others today and when the economy inevitably improves.”