With the holiday season sales of Dell’s low-priced personal computers (PCs) and fairly high component costs together doing the damage for the company in the fourth quarter, pushing its margin’s lower than the analysts’ projections, the world’s third-rank PC maker posted a 4.8 percent fall in its net income for the quarter.

As per the statistics forwarded by the Round Rock, Texas-based Dell, the fourth-quarter net income plunged to $334 million, or 17 cents per share, from the same quarter earlier year figures of $351 million, or 18 cents per share.

Despite the fact that sales witnessed a 16 percent increase to $14.9 billion, surpassing the average estimates of $13.8 billion, the company’s gross margin – that is, the percentage of sales that remain after production costs are subtracted - was 17.4 percent; lower than the average analyst estimates of 18 percent.

Noting that the margin fell chiefly because of sales of low-end consumer PCs and higher prices for memory chips, Dell’s Chief Financial Officer Brian Gladden said: “We’re disappointed with the margin. We’re disappointed in the profitability, so there’s more work to do there.”

About the new fiscal year, Gladden said that Dell was “cautiously optimistic,” and forecasts a fall in its quarter-on-quarter sales.

Nonetheless, with demand from business customers – accounting for 80 percent of the company’s sales - having shown a notable improvement in the preceding quarter, Dell is hopeful that the trend will continue throughout the year.