Dell Earnings Down, Forecast Disappoints

by InvestorPlace Staff | August 22, 2012 10:52 am

Dell (NASDAQ:DELL[1]) on Tuesday announced[2] an 18% drop in second-quarter earnings to $732 million, or 42 cents a share, with sales off by about 8% to $14.5 billion — the second consecutive disappointing report for the company. The news sent DELL shares down 6% in early Wednesday trading.

Dell felt the pressure on several fronts. One is the slowing of the global economy, as businesses hold off on IT investments. But another factor is the shift in spending to tablets, especially Apple‘s (NASDAQ:AAPL[3]) iPads. Dell remains a laggard with mobile devices.

To find growth, the company has been aggressively investing in enterprise storage and software, but Dell’s revenues still are concentrated in the PC business.

Going forward, Dell expects to see more weakness. The guidance for the full year is for earnings of $1.70 a share, which compares to an earlier forecast of $2.13 a share.

— Tom Taulli, InvestorPlace

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