Last night Dell announced its third quarter results, which highlighted the company’s continuing struggle to grow the topline. Revenue was down 11% year-on-year, and down 5.5% sequentially, to $13.7bn. However, the pain is not confined to just turnover, with non-GAAP operating income (excluding the nasty bits) down 31% to $886m. This pushed the margin down to 6.5% vs. 8.4% last time. EPS meanwhile was down 28% to $0.39.
Dell’s traditional business is being hit from all angles. For some time it has been attempting to address this by shifting to higher value services and solutions. So far in 2012 it has invested $4.7bn in acquiring new capabilities and IP (most recently is bought AppAssure, SonicWALL, Wyse, Make, Clerity, and QuestSoftware). The growth trend in its Enterprise Solutions and Services business is positive when compared with the rest of the firm: revenue was up 3% in Q3 to $4.8bn. However, the problem is that growth in this business is quite clearly being offset by the declines elsewhere (see Dell caught mid-leap).
We soon hope to catch up with the management team on this side of the pond to understand more about how the UK business is evolving.