Dell sales guidance stokes PC sector fears

Dell has forecast fiscal first-quarter revenue below Wall Street’s expectations, stoking fears the PC industry has not fully emerged from its downturn and sending the company’s shares more than 4 per cent lower.

The world’s No. 3 PC maker projected sales would be down 7 per cent this quarter from the previous quarter, when it posted revenue of $US16 billion. That translates into about $US14.9 billion, below the average forecast for roughly $US15.2 billion.

PC makers have grappled with slackening demand as mobile devices such as Apple’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 2 per cent at $US16 billion, in line with the average analyst estimate of $US15.96 billion according to Thomson Reuters I/B/E/S.

The company posted a net income slide of 18 per cent to $US764 million, or 43 US cents for the period, down from $US927 million, or 48 US cents a year earlier. Excluding one-time items, it posted earnings per share of 51 US cents, a penny below the 52 US cents expected.

For fiscal 2013, the company expects non-GAAP earnings per share to exceed $US2.13.

Dell’s large-enterprise business held up well, increasing sales 5 per cent in the quarter to $US4.9 billion, as corporations continued to upgrade aging hardware.

The shares of Dell, which vies with market-leading Hewlett Packard, slid to $US17.47 in extended trading after closing on the Nasdaq at $US18.21.

Reuters