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Dell warns of lower Q2 profits amid slowing sales

Dell warns of lower Q2 profits amid slowing sales

Dell warned that profits for its second quarter will be lower than expected because of "aggressive pricing and slow commercial sales worldwide."

Dell said last week that it expects profits for its second quarter to be lower than expected, blaming what it called aggressive pricing and slow commercial sales worldwide.

The world's biggest PC vendor forecast second-quarter earnings of $US0.21 to $US0.23 per share, on revenue of about $US14 billion.

Analysts had been expecting earnings of $US0.32 per share on revenue of $US14.2 billion, according to Thomson Financial.

The computer maker is due to announce the actual results on August 17.

The news comes days after Intel reported a drop in revenue and a steep decline in profits for its own second quarter. It blamed slower growth in PC sales and increased competition from rival, Advanced Micro Devices (AMD).

A day later, AMD said it had grown both revenue and profit for the quarter, although its earnings still fell short of financial analysts' forecasts.

The worldwide PC market grew by 9.7 per cent year-on-year for the second quarter, down from 12.9 per cent growth for the first quarter, according to the latest IDC figures.

Apple Computer fared a lot better. Second-quarter sales of its Macintosh computers were up roughly 16 per cent year-on-year, thanks partly to strong sales of portables, IDC said.

Apple reported earnings last week for its fiscal third quarter, ended July 1, that soundly beat Wall Street estimates. Sales of its iPod music players and Macintosh computers both increased sharply.


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