Dell has been in the middle of a takeover battle between the company’s billionaire founder and activist investor Carl Icahn. The company reported that its profit dropped 79 percent that was attributed to the decline of personal computer sales.
Michael Dell, the chief executive of the company, and the private equity firm Silver Lake want to take the company private for $24.4 billion. They argued that the change towards a provider of enterprise computing services was best done away from the prying eyes of the public market.
Dell reported that revenue from enterprise solutions, software and services increased 12 percent to $5.5 billion. Overall revenue dropped 2 percent. Its end-user computing division, which is where PC sales fall in, declined 9 percent.
Icahn and Southeastern Asset Management, which is a major stakeholder of Dell, said Michael Dell’s deal is too low for a company wanting to compete against Hewlett Packard and IBM in enterprise computing. They asked for new leadership as well as more cash or stock for shareholders.
Net income dropped to $130 million from $635 million the previous year. If specific items were excluded, income fell 51 percent to $372 million or 21 cents per share from $761 million or 43 cents per share the previous year. It was below the 35 cents Wall Street estimated.
Revenue in Dell’s fiscal first quarter that ended May 3 dropped to $14.1 billion, which was higher than the average analysts forecast of $13.5 billion according to a poll made by Thomson Reuters. Dell said it could not release a financial outlook because it is still in the middle of Michael Dell’s deal to go private.
Dell shares remained unchanged in after-hours trading at $13.44, after it closed at $13.43 on Nasdaq.
