Dell warns Q2 results below forecasts
Dell on Friday warned that second-quarter earnings and revenue would fall short of forecasts, blaming what it called ‘aggressive pricing’ in a slowing market.
By Agencies |
NEW YORK: Dell on Friday warned that second-quarter earnings and revenue would fall short of forecasts, blaming what it called ‘aggressive pricing’ in a slowing market.
The computer maker expects earnings per share of 21 cents to 23 cents, and revenue of about $14 billion, an outlook that sent its shares down more than 10% in pre-market trade.
Revenue growth at Dell, which sells directly to customers via the Internet and phone, has slowed in recent quarters amid tougher competition from No 2 PC maker Hewlett-Packard and complaints about poor after-sale services.
Some analysts question whether Dell can regain its high double-digit percentage growth of the early years of the decade. In hopes of retaining customers, Dell recently cut back on mail-in rebates and simplify its pricing on computers after customers complained the process for getting the sale price was too complex.
While the move could help improve customer relations, analysts said, it was unlikely to significantly increase sales for the world’ biggest personal computer maker.
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Last May, Dell unveiled plans to cut prices and is spending $100m to improve customer service, hiring more than 2,000 sales and support staff.While Dell “is seeing positive results and will continue to invest to drive a superior customer experience,” it said in a statement on Friday, its lowered outlook nonetheless reflects “aggressive pricing in a slowing commercial market worldwide.”
Dell shares fell 10.9% to $19.7 before the opening bell on the Inet electronic brokerage network.
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