Dell Inc, the PC maker embroiled in a takeover battle between its founding CEO and activist investor Carl Icahn, on Thursday reported a 72 percent slide in quarterly earnings as PC sales extended their downward spiral.Dell once led the world in computer sales and was held up as a model of production-chain innovation, but in recent years has become one of the more prominent victims of PC market erosion from mobile devices.Sales from its end-user computing division, which incorporates computers, slid 5 percent to $9.1 billion.The world’s No. 3 PC maker reported sales of $14.5 billion in the fiscal second quarter, flat from a year earlier and surpassing the $14.2 billion analysts on average had expected.But net income fell sharply to $204 million or 12 cents a share in the fiscal second quarter, compared to $732 million or 42 cents a share in the year-earlier period. Excluding items, it earned 25 cents a share, barely edging past a 24-cent average forecast, according to Thomson Reuters I/B/E/S.Gross margins slid a percentage point from the previous quarter to 19.6 percent.”It was predictably bad. It’s not a big surprise that margins compressed to the degree that they did, when they’re prioritizing sales volume over profitability,” Morningstar analyst Carr Lanphier said.Dell has been embroiled for months in a bitter contest over its future, with founder and CEO Michael Dell proposing a $25 billion buyout to take the PC maker private, and Icahn leading shareholder opposition on the basis that the offer is too cheap.The uncertainty hanging over Dell’s future may have played a part in crumbling profitability. Analysts say Dell has had to aggressively cut prices to win over enterprise customers that may be nervous about long-term contracts with a company in the middle of a complicated restructuring, and must compete in enterprise services with better-established rivals like Hewlett-Packard Co and IBM.”They can’t compete on a level playing field when you have a wrestling match over the future of the company,” Lanphier said.Shares of the company dropped 1 cent to $13.69 in after hours trade, following a brief rise.
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