Michael Dell's plan to fix the company he founded, Dell Inc. -- once the biggest personal-computer maker in the world -- is stalling.

Dell reported falling revenue and shrinking profits last week for its most recent quarter. And while profit margins grew, the gains resulted from painful cost cuts, including massive layoffs and decisions not to invest in launching products like portable music players and cellphones -- the kinds of gadgets Mr. Dell had described previously as building "brand lust."

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