Dell Inc forecasts lower than expected fiscal first quarter revenue
22 Feb 2012
Dell Inc has forecast fiscal first-quarter revenue that would be short of analysts' estimates with lacklustre demand for personal computers as also competition from Apple Inc hurting growth.
Revenue for the period ending in April is expected to fall 7 per cent to $14.9 billion, Dell said yesterday. This would be less than the average estimate of $15.1 billion, as per data compiled by Bloomberg. Per-share earnings excluding certain items would exceed $2.13 in fiscal 2013, as against analysts' $2.06 estimate.
According to analysts, Dell had been able to grow earnings because of cost management and supply-chain improvements. However, that could be done for only so long, and at a certain point revenue needed to start growing or else earnings would start to decline.
Dell, the third-largest maker of PCs, is hit by competition from Apple's Macs and iPads at the high end of the market and Lenovo Group Inc and Acer Inc at the low end.
Consumers were deferring purchases with slow economic recovery or going for iPads rather than traditional notebook computers.
Global PC shipments last year fell 4.9 per cent, the worst performance since 2001, according to research firm IDC. Additionally, hard disk drive production had been badly hit after last year's flooding in Thailand.
