Street Unimpressed by Dell Depressiron

Published on September 16, 2008
by John Paczkowski

If Dell sees “further softening” in global demand for its products, it’s going to need plastic surgery. Shares in the company fell to their lowest point in seven years Tuesday after Dell warned of a slowdown in investment technology spending in the U.S. and abroad.

“When Dell announced Q2 financial results on Aug. 28, 2008, it reported continued conservatism in IT spending in the U.S., which had extended into Western Europe and several countries in Asia,” the company said in a statement. “The company is seeing further softening in global end-user demand in the current quarter.”

Translation: If you thought Q2 was lousy, wait until you see our Q3.

Coming as it does after a second quarter in which Dell (DELL) reported a 17 percent drop in earnings and announced plans to sell off its factories, the warning doesn’t bode at all well for the company’s next round of financials. Said Bill Kreher, a securities analyst with Edward Jones, “The company’s inconsistent performance and lack of confidence means there’s a lot of uncertainty in the turnaround.”

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