Dell cuts costs, announces latest financials

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Dell has announced what it calls solid operating results in the midst of a global downturn in IT spending.

Despite the 'strong' tag, revenue for the last quarter was down by 16 per cent, and Dell attributes much of its financial strength to cost cutting. Operating expenses fell by £363 million (£254 million), compared to the same quarter the previous year. Revenue for the full year (FY2009) was $61.1 billion (£42.8 billion).

In March last year, Dell announced plans to reduce costs by $3 billion (£2.1 billion). These cost-cutting ambitions were reiterated again last month. Yesterday, Brian Gladden, Dell’s chief financial officer, explained that this target had now be raised.

"We said last March that we would reduce costs by $3 billion annually by the end of fiscal 2011," he said. "The cost actions we took this past year made us more competitive and delivered value to customers in a challenging economic environment. In fact, we now have a clear view to additional opportunities, and are raising our cost-reduction target to $4 billion.”

The company said it will take additional cost-reduction steps during its next financial year that it said would help it to emerge in a strong position once the recession comes to an end. "Within our business, we’re being very disciplined in managing costs, generating profitability and cash flow, and investing in ways that separate Dell from others today and when the economy inevitably improves," said Michael Dell, the company's chairman and chief executive.

In Europe, revenue was $3 billion for the quarter, representing a 17 per cent decline, while product shipments were down by 19 per cent.

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