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Computer maker sees desktop PC demand fall, but cost-cutting drive boosts profit

PC and server manufacturer Dell saw revenues fall by 3% to $15.2 billion in its most recent financial quarter, the company revealed yesterday. Financial analysts had expected revenue growth of 7% for the quarter.

The fall was driven by a sharp decline in desktop PC sales in its third financial quarter, which fell 14% from $4.7 billion to $4.1 billion year on year.

Also worrying for the company was a deceleration of sales in China. Revenue in the country grew by 18%, down from a growth rate of 33% in the previous quarter. Dell places strategic significance upon the Chinese market, which it hopes will counterbalance the ecomonic decline in the West.

But it was not all bad news for Dell. The company managed to cut operating costs to $1.8 billion, down 11% from the same quarter of the previous year, thanks mainly to 2,000-job reduction in its head count. That drove operating profit up 22% from $819 billion to $1.1 billion year on year, and share prices consequently rose.

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