by CIO Staff

Dell Warns of Lower Q2 Profits Amid Slowing Sales

Jul 21, 20062 mins
Data Center

Dell said on Thursday that it expects profits for its second quarter to be lower than expected, blaming what it called “aggressive pricing and slow commercial sales worldwide.”

The world’s biggest PC vendor forecast second-quarter earnings of US$0.21 to $0.23 per share, on revenue of about $14 billion.

Analysts had been expecting earnings of $0.32 per share on revenue of $14.2 billion, according to Thomson Financial.

The computer maker, in Round Rock, Texas, is due to announce the actual results on Aug. 17.

The news comes two days after Intel reported a drop in revenue and a steep decline in profits for its own second quarter. It blamed slower growth in PC sales and increased competition from rival Advanced Micro Devices (AMD).

A day later, AMD said it had grown both revenue and profit for the quarter, although its earnings still fell short of financial analysts’ forecasts.

The worldwide PC market grew by 9.7 percent year on year for the second quarter, down from 12.9 percent growth for the first quarter, according to figures this week from IDC.

European growth fell in particular, it said, due to a buildup of inventory and also because of the World Cup soccer tournament, which distracted people from going out and shopping for PCs, according to IDC.

Apple Computer fared a lot better. Second-quarter sales of its Macintosh computers were up roughly 16 percent year on year, thanks partly to strong sales of portables, IDC said.

Apple reported earnings on Wednesday for its fiscal third quarter, which ended July 1, that soundly beat Wall Street estimates. Sales of its iPod music players and Macintosh computers both increased sharply.

-James Niccolai, IDG News Service (Paris Bureau)

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