Dell issues Q4 profit warning

Doom and gloom from Texas

Dell today admitted its fourth quarter won't be up to par, blaming sluggish PC sales growth.

The direct-selling PC giant said it now expects earnings of 18-19 cents per share, down from its forecasted 26 cents. Dell lowered sales targets for the period, which ends on Friday, to between $8.5 billion and $8.6 billion - up 25-27 per cent from a year ago, but down from its earlier forecast of $8.7 billion.

This was the fifth time in a year the Round Rock, Texas-based company had lowered its forecasts. It joined just about every other PC vendor rivals in warning investors that the Christmas quarter was hardly worth the effort of getting out of bed for. In a statement, Dell blamed the "deterioration in global economic conditions and overall demand for computer systems and services".

According to the company, quarterly shipments will still be up 40 per cent on the same period for the previous year, led by server, workstation, storage products and notebook sales. It added that analysts thought the company added two per cent to its overall market share during Q4.

Last week, Gartner estimated that the US PC market grew a pitiful 10.3 per cent last year. Worldwide PC shipments rose less than 14.5 per cent - behind 1998 (15 per cent) and 1999 (21 per cent) growth figures.

Dell will post its full Q4 results on 15 February. ®

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