Dell loses market lustre after earnings miss

Stan Beer
Tuesday, 09 May 2006 23:44

IT Industry - Strategy

PC market leader Dell has had its lead whittled away by second placed rival HP and it now expects to miss its revenue and profit targets in its fourth quarter. All in all, not a good result for the company that was once the darling of wall Street, and the market made Dell pay, wiping 6% of the value of the company.

Dell's revenue for the quarter is now expected to be $14.2 billion, right at the bottom of its target range of $14.2 billion to $14.6 billion, and its earnings will miss by a mile, coming in at 33c a share compared to earlier guidance of 36c to 38c a share.

While Dell blamed the results on its "poor pricing decisions" during the second quarter of last year, analysts believe that a combination of a slowing market plus the impact of increased competition from HP, Acer, Lenovo and other up and comers, may be dampening the market for Dell.