Dell shares hit as revenue forecast misses estimates

Dell tumbled the most in more than three years after the company forecast fiscal second-quarter revenue that missed analysts’ estimates.

Revenue for the period ending in July will be $14.7bn to $15 billion (€11.7bn to €11.9bn), Round Rock, Texas-based Dell said in a statement, compared with the average $15.4bn (€12.2bn) analyst estimate compiled by Bloomberg.

The forecast, paired with a first-quarter sales and earnings miss, pointed to problems endemic to Dell, Steve Felice, Dell’s president, said in a conference call. The sales team focused on individual products instead of packages of hardware and software, he said. A reorganisation is under way aimed at lining up staff that can sell a complement of Dell products, instead of specialising in individual ones.

“In my own interactions with larger customers, we are seeing a delay and pause in spending activity,” chief executive Michael Dell said yesterday.

PC sales will remain sluggish because businesses won’t move immediately to Microsoft’s Windows 8 operating system when it’s introduced later this year. “Corporations are still adopting Windows 7.”

Shares slumped 15% to $12.84 in New York yesterday morning, the biggest intraday decline since Nov 13, 2008. The stock had climbed 3.1% this year.

Demand for Apple’s iPhone and iPad and other mobile devices are eating into Dell’s notebook sales.

— Bloomberg


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