Another Big Miss for Dell’s Outlook; Shares Tank
Dell just can’t seem to make Wall Street happy no matter what. Despite all the insistence that it’s out to pull off an IBM-like pivot away from commodity businesses like PCs and printers and toward higher-margin services and enterprise hardware, transformation is proving painful when it comes to showing, well, actual progress.
The world’s third-biggest PC maker gave a forecast for gain in sales of 2 percent to 4 percent in the current quarter, which would top out at $15 billion, fully $400 million short of what Wall Street analysts had expected.
That outlook came on top of sales in the quarter just ended that declined 4 percent to $14.4 billion, amounting to a miss of a half billion from the Street consensus. Per-share earnings were 43 cents, also short of expectations by three cents. It was the second miss in a row for Dell.
Naturally, Dell shares are getting spanked. As of 3 pm PT, they’re down almost 12 percent, at $13.33 a share. And the damage isn’t limited to Dell. Hewlett-Packard, which reports earnings tomorrow, is down in after-hours trading by 56 cents, or nearly 3 percent, to $21.22 a share.