Beleaguered Dell blames Apple, weak demand for putrid Q1 results, dismal outlook

“Computer maker Dell (DELL) blamed weak demand, heightened competition and poor execution for its disappointing first-quarter results and dismal second-quarter guidance, issued late Tuesday,” Patrick Seitz reports for Investor’s Business Daily. “Dell shares were down more than 17% midday Wednesday on the earnings results.”

“Dell’s Q1 sales fell 4% from the year-earlier quarter to $14.4 billion, which was $500 million short of Wall Street’s target,” Seitz reports. “Earnings per share fell 22% to 43 cents, 3 cents shy of views. It also forecast sales for the current quarter of $14.6 billion, when analysts were targeting $15.4 billion.”

Seitz reports, “In a conference call with analysts, Dell Chief Financial Officer Brian Gladden gave several reasons for the first-quarter revenue shortfall… ‘Our sales execution was not up to our expectations,’ he said. ‘Additionally, the demand environment was tougher than we planned, and I’d specifically highlight weaker demand in markets like EMEA (Europe, Middle East and Africa) and parts of Asia, in addition to public markets. Finally, we’re seeing a more challenging competitive environment in a few areas of the business.'”

“Gladden said Dell also was affected by consumers shifting spending from PCs to ‘alternative mobile computing devices,’ a veiled reference to Apple’s (AAPL) iPad tablet,” Seitz reports. “It marked the first time that Dell said competition from mobile devices such as tablets and smartphones was impacting its PC business, Sterne Agee analyst Shaw Wu said in a research note Wednesday. Dell’s consumer sales shrank 12% from a year earlier to $3.04 billion… And Dell isn’t expecting much of a bump in business from the release of Microsoft’s (MSFT) Windows 8 operating system later this year. ‘Corporations are still adopting Windows 7, so we don’t think there’ll be a massive adoption of Windows 8 by corporations early on,’ said Dell CEO Michael Dell on the call.”

Read more in the full article here.

MacDailyNews Take: Hey, Mikey, maybe you can make it up on volume?

Bwahahahahaha! (The sweet, sweet schadenfreude is particularly thick and juicy today, isn’t it?)

Karma sure is one helluva beautiful bitch!

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  1. I picture Michael Dell lying in a gutter and MDN repeatedly kicking him in the nuts.

    It brings a warm smile of pretty much total joy to my face.

    (Brought to you by Carl’s Jr.)

    1. Exactly! There’s no future for them! Their whole business model, the model they are synonymous with, is “good enough PCs cheap”. They were never in the business of innovation. It was just “slap together a box that can run Windows and games and push it out the door for paper-thin margins”. That model was good enough to make them a powerhouse back in the days when everyone was buying their first computer. But they’re hopelessly lost in the post-PC market.

      If I were them, I’d shrink the business drastically and concentrate on supplying PCs to offices, one market where they still do well.


  2. He also forgot to mention laptop competition.. The Air in particular. You can call a 4+lbs laptop with a crappy res 15 inch screen an ultrabook till you turn blue.. but that doesnt make it an ultrabook..

  3. Yeah, Dell id down now like apple was before, but you just wait for the “second coming of Michael dell” and it will rise the company to the #1 in the world….
    Wait a second, Mike dell is already in its second comming…
    I guess you can copy apple products, BUT YOU CAN’T COPY STEVE JOBS … Take that Dell.

  4. When you start blaming your competition, the bowl circling has begun in earnest. Another DCW, only a matter of time before what’s left is acquired by the Chinese or Koreans. IBM were smart to get out when they did.

  5. Let me cue the violin music to add some musical effects…

    Dell’s problem is that they are a one trick pony, they are now a builder of commodity computers. They never understood that there is more to product development than just building a piece of Hardware and assuming people will buy it.

    Dell should have stayed in the corporate hardware infrastructure business that made them a success before they became a commodity computer builder. Dell is to busy worrying about quarterly profits to plan 5 years ahead.

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