Dell Blows Earnings, Showing That Cost-Cutting Only Works For So Long

Last summer, Business Insider's Joe Weisenthal made an astute observation about Dell's earnings: the company, like much of corporate America, was great at "squeezing water from a stone."

In other words, it was able to increase profits -- and raise earnings expectations -- in the face of falling revenues.

So much for that.

Today, Dell reported Q4 earnings (its quarter ended Jan. 28, 2012) and the company missed onEPS for the first time in two and a half years. Non-GAAP EPS came in at $0.51 -- a penny below the consensus expectations of $0.52.

GAAP EPS was $0.43, down 18% from last year.

The company blamed a hard drive shortage from floods in Thailand, which forced it to sell cheaper, lower-margin systems than it wanted to, reports the New York Times. The company also blamed the cancellation of its phone business, and weak public spending.

It also said that revenue would drop 7% this quarter.

The stock is down 5% after hours.

• HUGE Job Cuts At Pepsi, As Firm Plans To Slash 3% Of Workforce
  
• LinkedIn's Stock Takes Off After Crushing Earnings With $167.7 Million In Sales
  
• Here Are The Key Market Moving Events For Friday, February 10, 2012