Dell (NASDAQ:DELL) reported that net income for the first fiscal quarter, fell almost 33% to $635 million, compared to $945 million during the same period last year. Adjusted EPS at the computer maker was 43 cents. That disappointed analysts’, who had expected 46 cents, Bloomberg noted.
Sales during the quarter fell 4% to $14.4 billion, which also missed Wall Street’s forecast of $14.9 billion.
Investors did not like the results. Dell shares plunged more than 13% in early Wednesday trading.
The company said its gross margin slid from 22.9% last year to 21.3% in the first quarter. For the current quarter, Dell predicted revenue between $14.7 billion and $15 billion, which fell short of analysts’ estimate of $15.4 billion.
Company officials said they were noticing a slowdown in customer spending and predicted that sales of personal computers would remain “sluggish” as businesses and consumers waited for Microsoft‘s (NASDAQ:MSFT) Windows 8 operating system, which will debut later this year. Many businesses are still in the process of upgrading to Windows 7, the company noted.
Analysts cited by Bloomberg noted that Dell’s notebook sales were eroding in the face of competition from Apple‘s (NASDAQ:AAPL) iPad.
The weak outlook for the current quarter prompted a number of analysts to cut their price targets for Dell shares, warning that PC makers faced a challenging environment, Reuters said.
While Dell is experiencing sales woes, it’s a different story at Lenovo (PINK:LNVGY), which posted a 59% jump in quarterly profits. Sales rose by 54% to $7.5 billion, driven by increased shipments to Russia, China and India.
The company reported that sales to emerging markets were up 43% to $1.2 billion during the quarter. Lenovo is now the leading PC vendor in India. Net profit for the year grew 73% to $473 million on revenues that increased 37% to $29.6 billion.
While other PC makers continue to struggle in a weak market, Lenovo increased PC shipments by 34.9% compared to the previous year, becoming the second-largest PC maker worldwide, behind Hewlett-Packard (NYSE:HPQ).