Dell has reported a 33 percent drop in profits in a disappointing quarterly report for former market leader.

The company, which has slipped to third place in the global PC market, said its profit in the first fiscal quarter fell to $635 million. Revenue in the quarter was $14.4 billion, a four percent decrease from the same period the previous year.

Dell said however the firm was moving away from its traditional PC base to services. "We continued to shift the mix of our business during a challenging environment," said Brian Gladden, Dell's chief financial officer.