Dell, one of the world’s largest makers of personal computers, reported better-than-expected earnings as the company’s cost-cutting efforts, including the elimination of 8,300 jobs over the past year, blunted the pain from falling revenues in the early stages of the world economic slowdown.
With most economists predicting that the deepening slump would hammer corporate technology spending over the next year, Dell said Thursday that it intended to keep slicing costs and would be cautious with its $8.9 billion cash hoard, even as it realigned its business model from direct sales to one that relies more on retailers to sell its laptops and desktop personal computers.
Dell, based in Round Rock, Texas, reported revenue of $15.16 billion in the third quarter, which ended Oct. 31. That was a 3 percent drop from the same quarter a year earlier and more than a billion dollars shy of the $16.22 billion that analysts had expected, according to Thomson Reuters.
But the company’s profits greatly exceeded Wall Street’s forecasts, largely because of the company’s strong emphasis on cost cutting and a gradual shift toward more profitable products.
Dell posted net income of $727 million for the third quarter, a 5 percent drop from the $766 million it earned a year ago. However, stock buybacks reduced the number of shares outstanding by 14 percent over the past year, so on a per-share basis, net income for the quarter rose 9 percent to 37 cents, compared with 34 cents a year ago. Wall Street analysts expected net income of 31 cents a share.
Dell’s shares, which have tumbled from $28.40 over the past year, closed at $9.81 in regular trading Thursday, down 54 cents. The stock recouped those losses in after-hours trading as investors digested the earnings report, which was released after the market closed.
Over the past two years, Dell’s earnings…