News

Dell Warns 1Q Earnings Will Miss Mark

Amid stiffening competition, computer maker Dell Inc. said Monday its fiscal first-quarter results will miss earnings targets, blaming the shortfall on "pricing decisions."

Amid stiffening competition, Dell Inc. said Monday its fiscal first-quarter results will miss earnings targets, blaming the shortfall on "pricing decisions."

The news sent Dell shares falling nearly 6 percent to a 52-week low.

The company said it expects to earn 33 cents per share on revenue of about $14.2 billion, compared with analysts' average estimate of 38 cents per share on revenue of $14.52 billion.

The news, released after the close of trading, sent shares of the tech bellwether tumbling nearly 6 percent.

Dell, which sells computers directly to consumers and is the world's largest PC maker, previously forecast a profit ranging from 36 cents to 38 cents per share, including stock-option costs of 3 cents, on revenue of $14.2 billion to $14.6 billion.

Dell said the shortfall from the previous guidance stems primarily from pricing decisions in the second half of the quarter that the company expects will accelerate revenue growth in the future.

During the quarter, Dell aggressively discounted some of its products as it lost ground to rivals.

In a statement, Dell CEO Kevin Rollins said the company had been "making investments in our support infrastructure and product quality" and slashing prices.

Company officials declined to comment further. Dell will report first-quarter earnings on May 18.

Market researcher Gartner Inc. said Dell saw its share of industry computer shipments decline to 16.5 percent in the first quarter of 2006 from 16.9 percent a year ago. Though Dell shipped 10.2 percent more PCs than it did in last year's first quarter, Gartner said the growth rate was Dell's slowest since the third quarter of 2001.

Dell shares fell 5.7 percent, or $1.51, to $24.93 on news of the revised guidance in late-session trading. Earlier, the stock rose 75 cents, or almost 3 percent, to close at $26.43 on the Nasdaq Stock Market. Dell shares are down nearly 12 percent so far this year, and hit a new 52-week low Monday after the bell.

Featured

  • Microsoft Changes Privacy Platform Name to SmartNoise

    Microsoft Research has changed the name of its "differential privacy" platform from "WhiteNoise" to "SmartNoise," according to a Wednesday announcement.

  • Why Restarting a Failed SCVMM Job Might Be a Bad Idea

    Occasionally, restarting a failed System Center Virtual Machine Manager job can leave your virtualization infrastructure in an unknown state. Here's how to avoid that.

  • Microsoft Starts Delivery of Latest Windows 10 Feature Update to Surface Hub 2S Devices

    Microsoft last week announced that users of Surface Hub 2S videoconference screens soon will be getting the latest Windows 10 feature update.

  • Microsoft Joins MEF To Bolster Azure for Operators Services

    Microsoft has joined the MEF, a nonprofit industry association that aims to standardize various software-defined networking (SDN) technologies used by service providers and enterprises.

comments powered by Disqus