Dell Shares Crash After Hours on Revenue Miss
While Dell’s per-share earnings were 54 cents, about five cents ahead of the consensus, sales were $15.66 billion, a full $100 million shy of what analysts expected. Worse, Dell said it expects revenue in the third quarter to be “roughly flat” relative to the second quarter, which it said would be consistent with typical seasonal patterns seen over the last two years.
There’s more: Dell slashed its sales growth outlook for the year. It said it now expects revenue to grow in a range of one to five percent, down from its previous range of five to nine percent.
CEO Michael Dell tried to reassure investors of an eventual turnaround in a statement: “We continue to see great momentum in the high-growth areas of our business, which is a direct reflection of the discipline and strong execution our global Dell team is applying to help solve real-world challenges for our customers. We’re creating efficiency across every step of the IT value chain and ultimately enabling all customers — from home users to large businesses and government organizations — to achieve the outcomes that matter most to them.”
It wasn’t enough to calm skittish investors: Dell shares initially fell as much as six percent on the news, and are as of 1:25 pm Pacific Time trading down 4.2 percent, or 64 cents.