Dell, the maker of personal computers, reported quarterly sales that missed estimates, even as its focus on higher-margin technology helped its profit.
Third-quarter revenue declined to $15.37 billion, Dell said Tuesday in a statement. Analysts had projected $15.7 billion on average, according to Bloomberg data. Net income rose to $893 million, or 49 cents a share, from $822 million, or 42 cents, a year earlier. Excluding some costs, profit was 54 cents a share, topping the 47-cent estimate.
The company is winnowing its line of consumer products and focusing on small and medium-size businesses and government agencies, which account for more than half its sales.
Dell has ceded market share and concentrated on more profitable corporate technology, including servers, services and networking. Dell now ranks behind Hewlett-Packard and Lenovo Group in the PC industry, down from first place in 2006.
Dell also tempered its revenue outlook for the rest of year, citing sluggish sales in the United States and Europe. A shortage of computer disk drives, caused by flooding in Thailand, presents another challenge.
“The revenue did come in a bit lighter than expected,” Brian T. Gladden, its chief financial officer, said in an interview. Consumer sales in developed countries and slow orders from the federal government hurt demand last quarter, he said.
Revenue will increase 1 percent to 5 percent this fiscal year, which ends in January, Dell said. Analysts had predicted sales growth of 2 percent.
Dell’s revenue from selling products to the public sector was down 2 percent from a year ago, to $4.4 billion. That figure included an increase in services revenue of 7 percent. Dell’s sales to consumers fell 6 percent over the same period, to $2.8 billion. Operating income in that segment was $76 million, or 2.7 percent of revenue.
International revenue outside of Canada, Western Europe and Japan rose 11 percent in the third quarter and is up 14 percent for the fiscal year, Dell said.
The company plans to keep making acquisitions to expand in hardware and software for corporate and government data centers, Michael S. Dell, its chief executive, said at a company conference last month. The diversification beyond desktop and laptop computers comes as PC sales ebb. IDC, a market research firm, cut its shipment forecast on Nov. 10, citing the Thailand flooding.
Rising waters have swamped industrial parks where companies like Western Digital and Toshiba make about a quarter of the world’s disk drives. The flood has caused drive prices to increase by $10 to $25, Stephen J. Luczo, the chief of Seagate Technology, said in a interview this month.
While the flooding may result in higher component prices, that could be offset by lower prices for other products, Mr. Gladden said. The company also has loaded up on disk-drive inventory.
“It’s still a pretty fluid situation,” he said.
The flooding may cause disk costs to climb, even if Dell does not have shortages, said Brian Marshall, an analyst at ISI Group in San Francisco. “I don’t think they’re going to have problems getting supply,” he said. “I do think they’ll have problems with pricing.”
While the flooding may result in higher disk-drive costs, lower memory-chip prices are helping PC makers rein in expenses, said Chris Whitmore, an analyst at Deutsche Bank in San Francisco.
“Memory pricing has just been fantastic for the box makers,” said Mr. Whitmore.
Dell fell 13 cents in after-hours trading, after the earnings report came out. Its stock closed up 2 percent at $15.63 in regular trading.
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