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08.12.05
Dell Missed 2nd Quarter
Marks
 By
John Stith
Round Rock, Texas computer giant Dell missed projections during the 2nd quarter
and suggested the 3rd quarter will also fall short. Sales for the Texas Tornado
of computer manufacturers appears to have slowed down.
Dell's stock tanked in early trading on Friday after missing revenues by almost
$300 million below forecasts even though net income climbed 28%. Dell shares fell
$3.36 a share to $36.22 or about 8.5% on the NASDAQ.
Dell attributed the shortfall to less-than-anticipated federal government purchasing
and massive consumer PC discounts. Revenues hit $13.4 billion, up 15% from last
year but down from the 13.7 billion predicted on Wall Street for this quarter.
"If Dell is not able to do that, it certainly raises the question that something
must be wrong," said the analyst, A. M. Sacconaghi Jr. of Sanford C. Bernstein
& Company to the New York Times. "Either the market is getting worse, or Dell
is getting too big and can't do that."
A number of industry watchers suggest Dell may be slowing down as they've reached
a plateau in the market place. They suggest that if this trend of sales continues,
Dell's growth projections will be greatly reduced.
Dell CEO said during a new conference that perhaps they offered too much of a
bargain to their customers.
"We don't think the competitive environment has fundamentally changed a lot,"
he said in a conference call with reporters. "Some of the lowering of average
selling price was our fault. We got a little bit more aggressive than we needed
to."
Rollins did say they still plant to run sales up to $80 billion in four years
from about $60 billion this year. Market growth will come from overseas sales
primarily.
About the Author:
John Stith is a staff writer for WebProNews covering technology and business. |
