InternetDell's Expansion Eats Into Earnings

Global expansion has its price, and for Dell it showed up on the bottom line.

Dell has come storming back from its rough past few years, but its rapid expansion efforts have finally caught up with it, as the company reported Thursday a 17 percent decline in profits for the second quarter due to all of its product development and overseas expansion. Dell reported net income of $616 million, or 31 cents a share, down from $746 million and 33 cents in the period a year ago. Revenue rose 11 percent to $16.43 billion. Analysts surveyed by Thomson Financial had been expecting income of 36 cents a share on revenue of $15.95 billion. On a conference call with financial analysts, Chief Financial Officer Brian Gladden said earnings were affected by what he called "strategic actions" to expand in areas, such as its global consumer business and overseas markets. Certainly it is making inroads. Dell (NASDAQ: DELL) has entered the U.S. retail market in a big way, selling its PCs in Best Buy, Staples and Wal-Mart. On the conference call, Gladden said international sales made up 47 percent of Dell's business. RELATED ARTICLES PTO Rains on Dell's 'Cloud Computing' Trademark Dell's Sweeping Laptop Revamp Targets Business Enterprises Looking to the Clouds, Dell Says For more stories on this topic: But that rapid expansion has its costs. Gladden said Dell had deferred revenue in its Europe, Middle East and Africa regions, which the company will recognize in future quarters. Gladden said this had an... [ Read more on www.internetnews.com ]

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