Dell Shares Dive as Revenues Soften
ROUND ROCK, Texas (TheStreet) -- Shares of Dell(DELL) , the world's No. 2 PC maker, fell after second-quarter revenue trailed analysts' estimates. The company said sales in the current quarter will slip from the second quarter.
The Round Rock, Texas-based company reported revenue of $14.5 billion, down from $15.7 billion in the same period last year, and below analysts' forecast of $14.64 billion.
Excluding items, Dell earned 50 cents a share, compared to 54 cents a share in the prior year's quarter. Analysts surveyed by Thomson Reuters were looking for earnings of 45 cents a share.
With PC sales under pressure, Dell expects its third-quarter revenue to slip between 2% and 5% sequentially. Excluding items, the HP(HPQ) rival also adjusted its full-year earnings guidance to $1.70 a share, which includes a 2- to 3-cent dilutive impact from Dell's pending acquisition of Quest Software(QSFT) . Analysts surveyed by Thomson Reuters were looking for earnings of $1.90 a share.
The company's shares slumped 3.6% to $11.90 in extended trading after falling almost 2% during the regular session.
"Growth in our PC business was challenging, as we saw a tough macroeconomic and competitive environment, and continued to focus on higher-value solutions in this business," Dell CFO Brian Gladden said in a statement released after the market close.
Dell, however, said that attempts to boost its enterprise business are starting to pay off.
"Our performance in the second quarter provided another proof-point that our long-term strategy is right," said Gladden. "We continued our progress in shifting the mix of our business to higher-margin enterprise solutions, led by solid growth in our server, networking, services, and Dell IP storage businesses."
Revenue from Dell's Enterprise Solutions and Services business grew 6% year-over-year to reach $4.9 billion. The company's server and networking sales climbed 14% over the same period, while revenue from Dell-owned storage increased 6%.
Dell Services revenue came in at $2.1 billion, an increase of 3%.
--Written by James Rogers in New York.