The dismal performance announced Thursday provided the latest evidence of a technological shift that is making it difficult to sell laptop and desktop machines. Until recently, consumers had regularly replaced machines with faster ones every few years. The money is going instead to powerful, more convenient mobile devices such as phones and tablets. PC makers have had to cut prices sharply, obliterating their profit margins.
The trend also has hobbled another technology powerhouse, Hewlett-Packard Co., which is scheduled to report its latest quarterly numbers Wednesday.
If there's ever an opportune time for a company to flounder, it's right now for Dell Inc. That's because Dell's board of directors is trying to persuade shareholders to accept a $24.4 billion buyout offer from CEO Michael Dell and other investors. Some shareholders say the offer price of $13.65 per share is too low, but Dell's board contends it's a good deal in light of challenges facing the company.
The results for the fiscal first quarter, which ended May 3, should reinforce the board's point. At the same time, opponents of that proposal may question whether the Round Rock, Texas, company is deliberately finding ways to make the results look as bleak as possible in an effort to get the deal done.
Brian Gladden, Dell's chief financial officer, sought to debunk the conspiracy theories in response to a question posed on a conference call with analysts. "We have not changed the way we are running the business," Gladden said. "The strategy for the company has endured, and I would say we continue to adapt that strategy, given the market conditions."
Michael Dell didn't participate in Thursday's call. Before the buyout offer was announced in...
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