Dell’s (NASDAQ:DELL) second-quarter net income plunged 23% y/y basis, as the personal-computer industry’s slump dragged on this summer. The company said however, that its earnings beat analysts’ estimates and projected stronger sales in the second half of the year, sending the shares up more than 6% in after hours trading.
Dell reported Q2 EPS of 24 cents, topping consensus estimates by a penny. Sales in the quarter fell 22% year-over-year, to $12.76 billion from $16.43 billion, topping analysts’ forecasts of $12.59 billion. The world’s second-largest PC maker said Q2 net income fell 23% to $472 million from $616 million, or 31 cents per share, a year ago. Meanwhile, operating expenses were 13.5% of revenue and $288 million, 14% lower than in last year’s Q2. Operating income was $671 million.
Michael Dell, Chairman and Chief Executive Officer said in a statement: “We have been reducing complexity in our organization and significantly lowering operating costs, in anticipation of improvement in the global economy and IT spending. If current demand trends continue, we expect revenue for the second half of the year to be stronger than the first half..” [emphasis added]
The company said during its CC that results included pre-tax expenses of $87 million, or 4 cents a share for “organizational effectiveness actions.” Dell also said its cash flow from operations was $1.1 billion, as the company ended the quarter with $12.7 billion in cash and investment.
Round Rock, Texas-based Dell didn’t guide for the third-quarter but analysts have forecast the PC maker to earn 25 cents a share on sales of $12.85 billion.