May 8, 2006 1:43 PM PDT

Dell revenue to fall below analyst expectations

A correction was made to this story. Read below for details.

Dell expects its first-quarter revenue to come in at the low end of the range it provided earlier this year, the company announced Monday.

When it announced its fourth-quarter earnings in February, the company expected to record between $14.2 billion and $14.6 billion in revenue for the period ended in April. Dell now expects to record around $14.2 billion, it said in a release after the close of the stock market Monday. Earnings per share are now expected to be 33 cents per share, down from the company's previous expectations of between 36 cents and 38 cents per share. Analysts surveyed by Thomson First Call had been expecting revenue of $14.5 billion and earnings per share of 38 cents for the first quarter.

"During Q1 we continued to execute on our strategy to reinvigorate growth by making investments in our support infrastructure and product quality and by accelerating pricing adjustments," Kevin Rollins, Dell's CEO, said in the release. In the slowing PC market, Dell lost share during the first calendar quarter of the year to rivals like Hewlett-Packard.

Once a darling of the financial community, Dell's stock has slipped during the past 12 months amid repeated earnings disappointments. It will formally announce its earnings results next week.

Dell's problems can be traced, in part, to its strong presence in the corporate PC market, said Charles Smulders, an analyst with Gartner. The corporate market is easing back on purchases as it completes a replacement cycle that began two to three years ago. Dell is also trying to resist getting bogged down in the low end of the consumer PC market, which it blamed for poorer-than-expected results last year, he said.

But at the same time, Dell is running into the inevitable growing pains that a company of its size is bound to experience, said Bob O'Donnell, an analyst with IDC. It is trying to spur growth in new markets around the world, but some of those markets aren't as receptive to Dell's direct-sales model as others, he said.

The first quarter was solid, so any problems Dell is having appear to be confined to them, O'Donnell said. Rollins will face questions from financial analysts Thursday looking for the reasons behind the slump.

 
Correction: This story misstated Dell's new expectations for earnings per share during its first quarter. The company expects to record earnings per share of 33 cents, down from its previous expectations of 36 cents to 38 cents.

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Replace Dell's CEO With Somebody from India
After all, they outsourced the rest of the company there.
Posted by john55440 (1020 comments )
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Replace Dell's CEO With Somebody from India
After all, they outsourced the rest of the company there.
Posted by john55440 (1020 comments )
Reply Link Flag
IT WAS JUST A MATTER OF TIME...
How long can a non-innovative company keep cranking out clones of other's technology. This cash cow is dying people. The time is now to sell your stock if you have any.

Challange: Name one innovation Dell has had in the last 5 years.
Posted by phoenix8603 (79 comments )
Reply Link Flag
IT WAS JUST A MATTER OF TIME...
How long can a non-innovative company keep cranking out clones of other's technology. This cash cow is dying people. The time is now to sell your stock if you have any.

Challange: Name one innovation Dell has had in the last 5 years.
Posted by phoenix8603 (79 comments )
Reply Link Flag
Dell destroys the IT industry
I replaced HP as my company preferred IT supplier. HP at least puts a certain % of the revenue into real IT innovation unlike Dell which claims innovation by virtue of its clone partners.

Features for features, HP is not much more expansive than Dell but the quality of HP business computer are getting better than Dell's. Dell quality had nose-dived beyond what I can accept. Dell P4 machines are dying left and right while their old P2 and P3 are still huming. You pay for what you get. Buy Dell and you pay peanuts but you get monkey who design it.
Posted by sci50514 (5 comments )
Reply Link Flag
Dell destroys the IT industry
I replaced HP as my company preferred IT supplier. HP at least puts a certain % of the revenue into real IT innovation unlike Dell which claims innovation by virtue of its clone partners.

Features for features, HP is not much more expansive than Dell but the quality of HP business computer are getting better than Dell's. Dell quality had nose-dived beyond what I can accept. Dell P4 machines are dying left and right while their old P2 and P3 are still huming. You pay for what you get. Buy Dell and you pay peanuts but you get monkey who design it.
Posted by sci50514 (5 comments )
Reply Link Flag
Better Yet, Replace CEO with Hector Ruiz...
Maybe they'll finally get some of the AMD audience. Paul Otellini would take the job but then he would have to stop dating Micael Dell, you know company rules and all.
Posted by fred dunn (793 comments )
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Better Yet, Replace CEO with Hector Ruiz...
Maybe they'll finally get some of the AMD audience. Paul Otellini would take the job but then he would have to stop dating Micael Dell, you know company rules and all.
Posted by fred dunn (793 comments )
Reply Link Flag
WAS BOUND TO HAPPEN
Dell's poor poor service is finally catching up w/them. The exec's will still receive huge salaries
and bonuses.The customers will as usual take the short end of the stick. The sooner the company closes the better it will be for the consumers.
Posted by (13 comments )
Reply Link Flag
WAS BOUND TO HAPPEN
Dell's poor poor service is finally catching up w/them. The exec's will still receive huge salaries
and bonuses.The customers will as usual take the short end of the stick. The sooner the company closes the better it will be for the consumers.
Posted by (13 comments )
Reply Link Flag
Less competition
"The sooner the company closes the better it will be for the consumers."

Right because less cometiton is always good for consumers.

Just think how awesome and inexpensive HP computers would be if they didn't have to compete on price and features with Dell.
Posted by raitchison (103 comments )
Reply Link Flag
Less competition
"The sooner the company closes the better it will be for the consumers."

Right because less cometiton is always good for consumers.

Just think how awesome and inexpensive HP computers would be if they didn't have to compete on price and features with Dell.
Posted by raitchison (103 comments )
Reply Link Flag
 

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