Dell warns that Q4 earnings will be below expectations

Computerworld |  Hardware

Dell Computer Corp. today became the latest technology vendor to issue a financial results warning, disclosing that profits in its fiscal fourth quarter will be about 33% less than expected.

Earnings for the quarter ending Feb. 2 are now likely to total 18 to 19 cents per share, instead of the 26 cents per share that Dell had been forecasting. The computer maker said revenue should come in between $8.5 billion and $8.6 billion -- up about 25% from last year's fourth quarter, but below the $8.7 billion level that Dell had expected to reach.

Round Rock, Texas-based Dell attributed the earnings shortfall to "deterioration in global economic conditions and overall demand for computer systems and services." In a statement, CEO Michael Dell said the company plans to continue to aggressively manage its internal cost structure during its next fiscal year as a result of the fourth-quarter showing.

Dell is one of many computer, software and semiconductor makers that have either already reported weaker-than-expected financial results or warned that their numbers will be below plan. For example, Microsoft Corp. last week reported results for its second fiscal quarter that were in line with a reduced-expectations warning it issued last month (see story).

Also last week, Apple Computer Inc. disclosed a $195 million quarterly loss on revenue that was $600 million below its original expectations (see story). And vendors such as Hewlett-Packard Co., Compaq Computer Corp. and NCR Corp. have all said their financial results won't meet earlier projections, due partly to slowdowns in sales to corporate users (see story).

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