Dell Discloses 2Q Sales Miss, Gloomier '12 View

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Published August 21, 2012

| FOXBusiness

Dell (DELL) suffered a lighter-than-expected 18% slide in second-quarter earnings, but the PC maker’s revenue shrank more than Wall Street had feared and management cut its full-year outlook due to more consumer troubles.

Shares of the tech company, which described a “challenging” PC environment, retreated about 4% following the mixed results.

Dell said it earned $732 million, or 42 cents a share, last quarter, compared with a profit of $890 million, or 48 cents a share, a year earlier. Excluding one-time items, the company earned 50 cents a share, compared with 54 cents a share a year earlier and the Street’s view of 45 cents.

Dell’s revenue dipped 8% to $14.48 billion, missing consensus calls from analysts for $14.64 billion.

“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,” Brian Gladden, Dell’s chief financial officer, said in a statement.

Dell’s revenue retreated around the world, sliding 6% in the Americas and 7% in Europe, the Middle East and Africa. Sales slumped 12% in the Asia-Pacific and Japan and even 15% in the emerging markets of Brazil, Russia, India and China.

Likewise, Dell suffered a slowdown across its business units, highlighted by 22% tumble in consumer revenue to $2.6 billion. The company also disclosed a 3% slide in large enterprise revenue to $4.5 billion, a 6% drop in public revenue to $4.1 billion and a 1% dip in small and medium business revenue to $3.3 billion.

Looking ahead, Dell warned it expects a “challenging end-user computer environment” for the second half of the year, contributing to a 2% to 5% sequential decline in sales for the third quarter.

Dell also downgraded its full-year non-GAAP EPS target to “at least” $1.70, which would significantly trail the Street’s view of $1.90.

Meanwhile, Dell on Tuesday tapped former Hewlett-Packard (HPQ) networking chief Marius Haas to serve as its president of enterprise solutions.

“As we continue to drive our end-to-end solutions strategy, Marius' impressive mix of business, operational and strategic expertise is a great fit," Dell CEO Michael Dell said in a statement.

Dell’s shares fell 1.75% to $12.34 during regular trading on Tuesday, leaving them down almost 16% in 2012 and 12% over the past 12 months. 

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http://www.foxbusiness.com/technology/2012/08/21/dell-discloses-2q-sales-miss-gloomier-12-view/