Dell warns 1Q earnings will miss mark; shares tumble

“Amid stiffening competition, computer maker Dell Inc. said Monday its fiscal first-quarter results will miss earnings targets, blaming the shortfall on ‘pricing decisions.’ The news sent Dell shares falling nearly 6 percent to a 52-week low,” May Wong reports for The Associated Press. “The Round Rock, Texas-based company said it expects to earn 33 cents per share on revenue of about $14.2 billion, compared with analysts’ average estimate of 38 cents per share on revenue of $14.52 billion.”

“During the quarter, Dell aggressively discounted some of its products as it lost ground to rivals. In a statement, Dell CEO Kevin Rollins said the company had been ‘making investments in our support infrastructure and product quality’ and slashing prices. Company officials declined to comment further. Dell will report first-quarter earnings on May 18,” Wong reports. “Stamford, Conn.-based market researcher Gartner Inc. said Dell saw its share of industry computer shipments decline to 16.5 percent in the first quarter of 2006 from 16.9 percent a year ago.”

Full article here.

[Thanks to MacDailyNews Reader “LinuxGuy” for the heads up.]

MacDailyNews Take: Gee, isn’t that just too bad?

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  1. oddly, since Dell was up nearly 3% today, this translates into just an $0.83 decline in share price. Hardly teh “punishment” Wallstreet would no-doubt dole out to AAPL should the iPod sell 9.1M instead of 9.2M units in a quarter.

  2. macromancer –

    In this case, no, Apple won’t be moving forward in the market cap war because today Apple went from 72.90 to 71.55. they actually did WORSE in the market today compared to Dell, though Dell missed projections and Apple won the Beatles lawsuit.

    I hate the illogical market.

  3. rasterbator –

    Dell is “prime” for a hostile takeover? excuse me? based upon _what_??

    In the history of history, I can’t think of any situation where the marekt _leader_ was taken over by another company. It doesn’t happen because to leverage a hostile takover you need lots of equity and cash on hand.

    Unless Microsoft decided they wanted to own the end-to-end solution, I don’t believe there are any other tech companies with enough cash to buy Dell.

    Dropping a few percent in a day doesn’t discount the stock. The company is STILL the number one computer vendor with long term service contracts and direct sales to the world’s largest companies.

    In short, Dell isn’t going anywhere.

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