Dell confirms disappointing Q3 results

Dell confirms disappointing Q3 results

As Dell warned last week, its third-quarter revenue and earnings were lower than expected, something the company blamed on its U.S. and U.K. operations.

Dell Inc.'s third-quarter revenue and earnings came in short of the company's original expectations, as it had warned last week.

Third-quarter revenue was US$13.9 billion, as compared to revenue of $12.5 billion in last year's third quarter. Dell had originally expected revenue between $14.1 and $14.4 billion, but in an earnings warning last week the Round Rock, Texas, company blamed a slow quarter in its U.S. consumer business and its U.K. operations for dragging down results.

Net income for the quarter was $606 million, as compared to net income of $846 million last year. Dell was forced to take a one-time $442 million charge during this year's quarter to account for a variety of problems, including the costs associated with replacing faulty capacitors on some of its OptiPlex desktops, layoffs in its Texas and U.K. offices, and, perhaps most surprisingly for a company known for its lean direct-selling operation, inventory write-offs.

Excluding the charge, earnings per share for the quarter were $0.39, as the company predicted last week. Before the earnings warning, Dell and financial analysts originally predicted earnings per share would fall between $0.39 and $0.41.

On a positive note, Dell continued to strengthen its services business, one of the company's top priorities this year. Revenue from services increased by 36 percent to $1.2 billion in the quarter.

Dell Chief Executive Officer Kevin Rollins is expected to give more details about the company's third-quarter problems during separate conference calls with reporters and analysts Thursday afternoon.

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