Soon, however, increasing competition and cost pressures began to erode Dell’s margins.
Even though the company’s net revenue continued to increase to $57.4 billion in fiscal year
2007 and $61.1 billion during fiscal year 2008, its net income dropped to $2.6 billion in 2007
with a slight increase to $2.9 billion in 2008. The “great recession” of 2008–2009 took its toll
on both Dell and the computer industry. Dell’s fiscal 2010 (ending January 29, 2010) net
income fell further to $1.4 billion on $52.9 billion in net revenue. Sales improved during
calendar year 2010 as the global economy showed signs of recovery. Net revenue for February
through July 2010 increased to $30.4 billion compared to only $25.1 billion during the first
half of 2009, while first half net income rose to $886 million in 2010 compared to $762 million
during the same period in 2009. Nevertheless, Dell’s net income was only 2.91% of net revenue
during the first half of 2010 contrasted with a much rosier 6.45% during 2006. (Note: Dell’s
financial reports are available via the company’s website at www.dell.com.)
Soon, however, increasing competition and cost pressures began to erode Dell’s margins.
Even though the company’s net revenue continued to increase to $57.4 billion in fiscal year
2007 and $61.1 billion during fiscal year 2008, its net income dropped to $2.6 billion in 2007
with a slight increase to $2.9 billion in 2008. The “great recession” of 2008–2009 took its toll
on both Dell and the computer industry. Dell’s fiscal 2010 (ending January 29, 2010) net
income fell further to $1.4 billion on $52.9 billion in net revenue. Sales improved during
calendar year 2010 as the global economy showed signs of recovery. Net revenue for February
through July 2010 increased to $30.4 billion compared to only $25.1 billion during the first
half of 2009, while first half net income rose to $886 million in 2010 compared to $762 million
during the same period in 2009. Nevertheless, Dell’s net income was only 2.91% of net revenue
during the first half of 2010 contrasted with a much rosier 6.45% during 2006. (Note: Dell’s
financial reports are available via the company’s website at www.dell.com.)
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