Dell's profit slides despite sales boost

Rising costs took a bite out of Dell's profits for the fourth quarter.

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Dell's profits declined by 4.8 per cent during its fourth quarter, despite an increase in sales across the board.

Rising component costs coupled with price cuts meant that despite an 11 per cent increase in revenue to $14.9 billion from last year, Dell's income slipped to $334 million from $351 million a year ago.

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The results disguised increased sales in each of Dell's business units, most notably its small and medium business segment, which saw revenue hit $3.3 billion - a 10 per cent increase on last year. Dell's consumer PC business also had a solid showing, with revenue rising to $3.5 billion.

Speaking on a conference call to announce the results, Dell's chief executive Michael Dell claimed the company's services division would soon begin picking up the slack.

However, in the meantime Dell's shareholders have to contend with a 13 per cent drop on full-year revenue to $52.9 billion from fiscal 2009. Full-year net income was $1.43 billion, a 42 per cent drop from the previous fiscal year.

The results come in sharp contrast to those posted by HP, which saw profits leap 25 per cent on the back of strong sales of consumer PCs, servers, and printers.

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