Vista boost not enough to stabilize Dell's revenue, earnings

Round Rock (TX) - Dell today announced preliminary results for its fiscal Q4 2007, ended on February 2 of this year. Revenues and earnings came in significantly below last year’s levels.

Dell reported Q4 revenues of $14.4 billion and a net profit of $673 million, which is almost exactly the result the company reported for the preceding quarter. Compared to one year ago, revenues were down 4% from $15.2 billion, while profits dropped 32% from $1.01 billion to $673 million.

For the entire year, Dell reported revenues of $57.1 billion, which is about 2% above the prior year, in which the company reported sales of $55.9 billion.

The impact Windows Vista could not save Dell from another rough quarter. The new operating system was launched just four business days before the end of Dell’s fiscal Q4, but Microsoft has been marketing the software since the very beginning of last year’s Christmas season, which helped PC manufacturers to generate Vista-related holiday sales.

While Dell did not provide a detailed Q4 result, the data published indicates that the company still has some work to do before it can stabilize its revenues and profits and take the company back on a path of growth.

Desktop PC revenues declined year over year by 22% to $4.6 million, driven by an 18% decline in unit shipments. Mobile computers, typically the growth driver for computer vendors these days, saw revenues decline 2% to $3.8 billion on a 2% increase in shipments.

"We are disappointed with the company’s results, but what matters is our future plan of action," said Dell chairman and CEO Michael Dell, who recently took back control of the company he founded. "We are systematically moving to increase efficiencies, improve execution and transform the company. Our business model will become more aligned with the needs of our customers, which will improve their experience and yield improved growth and profitability for the long-term."

Dell’s stock dropped about 2% in after hour trading on Thursday.