Dell shares fall on earnings miss, outlook

SAN FRANCISCO — Dell Inc.’ s forecast fiscal first- quarter revenue below Wall Street’s expectations Tuesday, stoking fears the PC industry has not fully emerged from its downturn and sending the company’s shares more than four per cent lower.

The world’s No. 3 personal computer maker projected sales would be down seven per cent this quarter from the previous quarter, when it posted revenue of $ 16 billion. That translates into about $ 14.9 billion, below the average forecast for roughly $ 15.2 billion.

Dell’s fiscal fourth- quarter earnings also came in below Wall Street’s view as strength in its corporate business unit was offset by weakness in the division that caters to public businesses.

Investors were disappointed by the “lack of the upside in the quarter as well,” ISI Group analyst Brian Marshall said. “It’s going to take a little bit of time for Dell to turn around the tanker ship.”

“They have $ 65 billion revenue and it takes a long time to move the needle to more strategically relevant revenue sources, and we are just not seeing signs of progress yet,” he said.

PC makers have grappled with slackening demand as mobile devices such as Apple Inc’s ipad erode market share, while a shortage of hard drives after flooding in Thailand crimped supply.

Revenue in Dell’s fiscal fourth quarter was up two per cent at $ 16 billion, in line with the average analyst estimate.