Dell shares fall on earnings miss, weaker than expected outlook

“Dell Inc. forecast fiscal first-quarter revenue below Wall Street’s expectations, stoking fears the PC industry has not fully emerged from its downturn and sending the company’s shares more than 4 percent lower,” Poornima Gupta reports for Reuters.

“The world’s No. 3 personal computer maker projected sales would be down 7 percent this quarter from the previous quarter, when it posted revenue of $16 billion. That translates into about $14.9 billion, below the average forecast for roughly $15.2 billion,” Gupta reports. “Dell’s fiscal fourth quarter earnings also came in below Wall Street’s view as strength in its corporate business unit was offset by weakness in the division that caters to public businesses.”

Gupta reports, “PC makers have grappled with slackening demand as mobile devices such as Apple Inc’s iPad erode market share, while a shortage of hard drives after flooding in Thailand crimped supply.”

“Revenue in Dell’s fiscal fourth quarter was up 2 percent at $16 billion, in line with the average analyst estimate of $15.96 billion according to Thomson Reuters I/B/E/S,” Gupta reports. “The company posted a net income slide of 18 percent to $764 million, or 43 cents a share, for the period, down from $927 million, or 48 cents a share, a year earlier. Excluding one-time items, it earned 51 cents a share, a penny below the 52 cents expected.”

Read more in the full article here.

MacDailyNews Take: Just $764 million profit on $16 billion? That’s a heck of a lot of work for not very much. Woeful, in fact. Seriously, why bother – unless you goal is to doom as many people as possible to inferior personal computing? Bottom line: It looks like making it up in volume isn’t working out very well, huh, Mikey?

Michael Dell

Did you know that with each earnings miss, Mikey’s eyes move a millimeter closer together? We predict he’ll go Cyclopsian by Q415.

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49 Comments

      1. I don’t think the separation is between a food retailer and a computer maker, I’d say it’s more about commodity vs non-commodity products.

        Dell painted themselves into a corner for year with their strategy of shaving factional cents off the costs of their computers. You get to a point where if there’s nothing else to offer in your product then this strategy will hit a wall.

        Combine that with having no control over the customer experience once they get your product out of the box, and you have a recipe for failure.

        Dell’s business model is a death spiral.

    1. Google is 10 to the 100. Googleplex is 10 to the Google. This is far more than an astonishing size.

      To put this in perspective. If you had the number Pi to about 42 significant digits. Which is less than one google of accuracy, you could measure the diameter of the known universe to within the tolerance of one hydrogen atom (the smallest element).

      Suffice to say the number google is sufficient to describe anything in the known universe and a the number Googleplex has no real use in this universe other than as a silly number.

      1. An astonishing size would be Graham’s Number, a number so vast that it is impossible to write it out in digits. Even if each digit occupied one Planck length, there would not be sufficient space in the entire Universe to support such a digital representation.

        Knocks a Googleplex into a cocked hat! 🙂

        =:~)

        1. If the number is so vast that it can’t be written, then surely it couldn’t be factored. And that means…it is impossible for even one Graham Cracker to exist.

          Poof! Nabisco just vanished!

          1. Well it can be written, you just have to use a different notation system like Knuth’s up-arrow notation. Iterating just the first term in Graham’s Number exceeds the universe’s quota of Planck volumes (roughly 10E185)… and there are 63 iterations to go! Poor old Nabisco ain’t got a hope 🙂

            =:~)

  1. It’s strange how only PC assemblers were screwed by the hard drive shortages and Apple seemed to significantly increase production of Macs.

    The more we hear about those hard drive shortages being blamed for low output, the more it sounds like a lame excuse to try and conceal the real truth, which is lack of demand for Wintel PCs and strong demand for Macs.

    1. Agreed. The Thailand problem is a convenient scapegoat. If there was demand, we would be seeing escalating Window box prices and articles bemoaning that fact. Much like when back in the 1990s there was a fire at the factory in Japan that made almost all of the epoxy used for packaging chips, and memory prices spiked for a while.

    2. I agree. I have never once seen the shelves empty at Best of Luck (oh, Best Buy) nor heard from anyone that they tried to buy a Windex computer and they were out of stock nor that a store didn’t have what they wanted. We did pay a bit more for some replacement HDs (yes, on Apple boxes as well as Windex boxes – in fact we have had HDs fail recently on two iMacs that were just under two years old). So this HD shortage thing is bogus in my estimation. I am calling shenanigans!

  2. Cyclopsian! LMR*AO!

    Versus Apple’s calendar Q411: $46.33 billion in revenue, $13.06 billion in profit.

    Margins, Mikey. Margins.

    (Brought to you by Carl’s Jr.)

    *Rotund

    1. It’s not adding up Moe …. We sold little more than a third of what Apple sold so we shoulda made over a third of what Apple did, Moe – We shoulda made over 4 Billion dollars – BUT something is wrong Moe …..

      We only made like, geez Moe we didn’t make much – Don’t tell Mickey about this, OK Moe or at least don’t tell him about how well Apple is doing – Mickey gets mad every time he sees an Apple product Moe, know what I mean Moe, be cool Moe here comes Mickey.

  3. “stoking fears the PC industry has not fully emerged from its downturn”

    WTF? Who thought the PC industry was emerging from its downturn? Don’t they look at the data? Without Apple, the PC market has been shrinking.

    I’ve been wondering why Microsoft and Dell have been rising the last 2 months. They’re up over 20% in that time. I kept asking people what they thought was driving it, and everyone said it was expectation of Win8!?! Are they nuts?

    As I posted recently, the multiple of how many times larger Apple is than Dell will grow rapidly over 20x, as soon as this recent Dell bubble gets popped. It looks to be down 5% in after-hours trading, so I suspect Apple will be 15.5x larger than Dell tomorrow morning and getting wider very quickly.

  4. strength in its corporate business unit was offset by weakness in the division that caters to public businesses

    So what are public businesses?

    Government at all levels? Read the news and you see how many of those are in extreme budget crises. Not a surprise?

    Small businesses? Those most likely to go over to Apple.

    It must suck to be him.

  5. I was forced to use a plastic encrusted piece of Dell shit once. Man you could the whole laptop chassis creak as you depressed the keys on the keyboard. Cheap plastic fantastic junk that only a corporate purchasing manager chasing pennies in savings could love. But when you foist that crap on to users, you get output approximating to monkeys bashing on a keyboard trying to churn out a Shakespeare novel but attaining the level of JK Rowlings crapola instead.

  6. Yes Dell produces crap and I wold never use one. I do however, think that they employ a lot of people and make a little profit to boot. I think those people believe this is a good thing especially in these days of high unemployment.

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