PC maker Dell Inc. (DELL) announced a profit for the third quarter Thursday that rose from last year, despite a fall in revenue. This came as the company improved margins through cost-cutting and a more profitable product mix.
The company reported net income for the third quarter of $727 million or $0.37 per share. This compared to $766 million or $0.34 per share for the year-ago quarter.
Revenue for the third quarter fell 3% to $15.16 billion from $15.65 billion in the prior-year quarter.
Analysts were looking for the company to make $0.31 per share on revenue of $16.22 billion.
"We increased profitability with an improved mix of products and services - more than a third of our revenue and profit now comes from servers, storage, services and software and peripherals - and benefited from initiatives to improve our competitiveness, including tight cost controls," Michael Dell, chairman and CEO, said in a press release. Dell said it sees global IT end-user demand will continue to be challenging going forward.
"Against this backdrop the company will continue to focus on improving competitiveness, lowering costs and improving its mix of products and services to optimize liquidity, profitability and growth," the company said in a statement.
In September, Dell said it saw further softening in global end-user demand in the third quarter. The company had said at that time that it expected to incur costs as it realigns its business to improve competitiveness, reduce headcount and invest in infrastructure and acquisitions.
Dell, once a darling of Wall Street, has been going through a turbulent period since August 2006, when it first disclosed an internal accounting investigation and issued a massive recall of notebook batteries due to potential fire hazards.
Dell has been facing stiff competition from both domestic competitors like HP and Apple, as well as Asian manufacturers such as Taiwan's Acer, China's Lenovo and Japan's Toshiba. In the third quarter of 2006, Dell lost its No. 1 position in the world PC market to arch-rival HP and is still lagging behind in the No. 2 position.
Earlier this week, HP reported preliminary fourth-quarter earnings that topped expectations, though its revenue growth was sluggish in the face of the global economic slowdown.
HP has been cutting jobs as part the integration of its massive EDS acquisition. The company said in September that it planned to cut about 24,600 jobs, or about 7.5% of its work force, over the next three years as part of EDS integrating the business - a move that probably helped margins.
HP will announce its full fourth-quarter results next week.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.