Dell Shares Smacked as Earnings, Sales Miss Forecasts
Dell reported financial results that were worse than last year and also fell short of Wall Street expectations, punishing the company's shares.
Dell, which is battling a slump that's caused it to lose its ranking as the world's No. 2 personal computer maker, reported third-quarter earnings of 23 cents a share excluding one-time items. Last year this time, Dell earned 37 cents a share.
Sales for the most recent quarter fell to $12.9 billion, compared with $15.16 billion last year.
Analysts who follow Dell expected the company to report a profit of 28 cents a share on sales orf $13.18 billion, according to Thomson Reuters.Dell stock dropped about 6 percent in extended trading. Get after-hour quotes for Dell here.
The shares finished the regular Nasdaq session at $15.87 on Thursday.
Rivals Hewlett-Packard and Acer have stolen business from Dell as the company grapples with anemic spending on technology by corporations and government agencies. Those large customers make up 80 percent of Dell's business.
Dell says some areas are improving but repeated its earlier prediction that a meaningful improvement in technology spending by big businesses won't come until next year.
The weak results from the world's third-largest maker of personal computers surprised analysts since they came after larger rival HP had reported stronger-than-expected preliminary earnings.
"It was universally expected they would beat because pretty much everyone else in the PC space has posted strong numbers," Kaufman Bros. analyst Shaw Wu said of Dell. "So, the conclusion is that they lost share—lost a lot of share."
Although Dell did not provide a formal outlook, it said it expects fourth-quarter revenue to improve from the third quarter.
"We are seeing improvement in overall underlying IT demand that is continuing into the fourth quarter," Chief Executive Michael Dell said in a statement.
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- AP and Reuters contributed to this report.