Dell Inc. executives say it's too early to judge the success of their latest push into the consumer PC market, but the computer maker's latest financial results show that the company still has a long way to go to restore its once golden image on Wall Street.
Dell, the world's No. 2 PC maker, promises an aggressive cost-cutting campaign — that means more layoffs on top of the 3,200 jobs already eliminated in the past year — to boost profits.
And it is counting on growth in emerging markets to offset softness in the United States, where customers such as financial-services firms are reining in spending on technology.
"I wouldn't be surprised if the U.S. is our slowest-growing region certainly for the next couple of quarters, given what we see going on in the economy," said founder and Chief Executive Michael Dell.
The company said Thursday that its fourth-quarter profit dropped 6.4 percent, to $679 million or 31 cents per share, in the quarter ended Feb. 1. That included several one-time expenses totaling 7 cents per share and gains of 4 cents per share.
Analysts surveyed by Thomson Financial had predicted a profit of 36 cents per share. A year ago, Round Rock, Texas-based Dell earned $726 million, or 32 cents per share.
Sales rose 10.5 percent to $15.99 billion, but that was below the $16.27 billion that analysts had expected.
Dell shares rose 10 cents to close at $20.87 before the report was released. In after-hours trading, they fell 32 cents, or 1.5 percent.
Chief Financial Officer Donald Carty said in an interview that the company had restored growth in key areas, including notebook computers — where revenue rose 24 percent — and emerging markets. Revenue was 36 percent higher in Brazil, Russia, India and China.
Dell built its business by selling computers directly to companies and consumers on the phone or over the Internet, but now it's selling through retailers including Best Buy Co., Wal-Mart Stores Inc. and Staples Inc.
Carty said Dell gained share in the consumer market even though some deals, such as Best Buy, occurred too late to add much to fourth-quarter sales. He said the benefits would be more obvious in the current quarter, which ends in April.
Shaw Wu, an analyst with American Technology Research, said it was "disappointing" that Dell shipped 19 percent more units but still missed Wall Street's targets for sales and profits. He concluded that Dell "sold a lot of low-end stuff" and cut prices in the face of tough competition.
"The store shelves are fairly crowded," Wu said. Hewlett-Packard Co. and Apple Inc. "are doing very well globally. Those are two really tough guys to compete with."
Goldman Sachs analyst David C. Bailey said Dell has taken steps toward a recovery, such as buying companies that sell technology services to small businesses. But he lowered his outlook for near-term earnings, citing two straight disappointing quarters.
To boost profits, Dell is trying to cut $3 billion to $4 billion in costs over several years. Last year, the company announced plans to cut 8,800 jobs or 10 percent of its work force. So far, it has cut 3,200, Carty said. The other reductions "may take us a little longer than we expected," he said.
On a conference call, an analyst asked Michael Dell how long it would take the company to raise its profit margins to those of competitors. Dell said it would be a good question to explore in April, when the company holds a meeting with analysts in Round Rock.
For the fiscal year that just ended, Dell earned $2.95 billion, up from $2.58 billion the year before. Revenue rose 6.5 percent to $61.13 billion.