Saturday, November 22, 2008, 3:56AM ET - U.S. Markets Closed.

Dell Q2 Sales Huge, Profits Lousy

Posted Aug 28, 2008 05:19pm EDT by Dan Frommer in Investing, Computers

From Silicon Alley Insider, Aug. 28, 2008:

I.T. Spending Weakness "Extending"

A mixed quarter for Dell: The computer maker reported higher than expected sales, but profits missed by a long shot. And Dell said conservatism in I.T. spending is spreading beyond the U.S., extending into Western Europe and "several countries in Asia." Shares dropped 9% in after-hours trading.

Dell laptops continue to sell well -- unit sales increased 44% -- but revenue only increased 26%, meaning people are buying cheaper computers.

We'll cover Dell's (DELL) earnings call LIVE at 5 p.m. ET; refresh for the latest.

Key Stats:

Revenue: $16.4 billion vs. $15.95 billion consensus
EPS: $0.31 vs. $0.36 consensus

For more on Dell including notes from the conference call, go to SAI.

12 Comments

x
x - Thursday August 28, 2008 05:22PM EDT

Back to $18

you
bostonc2003 - Thursday August 28, 2008 05:38PM EDT

Too bad HP has been stealing their mkt share!

David
David - Thursday August 28, 2008 05:52PM EDT

Boston, you are correct. HP's global distribution model is the envy of the industry. Dell has to continue its work on building non-US channels because that is where the significant growth is.

northstormmen
northstormmen - Thursday August 28, 2008 06:38PM EDT

Has the Dell brand been damaged by selling at Walmart and others? At the discounters your might sell alot more of the lower end laptops which explains the loppy numbers!!!!

you
datmelectronics - Thursday August 28, 2008 06:40PM EDT

As you all say.......I just bought 2 comps...both hp...dell just was not price competitive....I like them but they are just going to have to do better than their good name.

David
David - Thursday August 28, 2008 06:43PM EDT

Northstormmen, I don't think so. Dell's dominant customer base has always been enterprise. Q2 FY09 numbers are a testament to the fact that enterprise buying has slowed. Dell was smart to include the likes of WalMart and BestBuy as retail channel outlets.

you
zimbobweigh - Thursday August 28, 2008 06:45PM EDT

While Dull is focussing on selling computers it can't make money on, HP continues marching into services, software, and other areas Dell can't touch. Mikey's heading up a one-trick pony which has turned into a nag. But hey, they're going to make another iPod competitor, right??

weeklyta
weeklyta - Friday August 29, 2008 03:46AM EDT

Dell should gap down and breakaway from the uptrend. It's over. www.weeklyta.blogspot.com

Johnny Ike
Johnny Ike - Friday August 29, 2008 05:33AM EDT

Dell has good tomorrow or it might be taken over.There is a take-over speculation and consolidatin in the sector one way or another in two to three years time.Dell is affected if that happen.

retailexecutive
retailexecutive - Friday August 29, 2008 11:05AM EDT

HP is really the class of this segment. Their earnings will not disappoint.

rollingstonegathersnomoss
rollingstonegathersnomoss - Friday August 29, 2008 12:29PM EDT

Dell won't be hurt by a stronger dollar like HPQ down the road...could be a good buying opp if it hits $18-20

Ray
Ray - Friday August 29, 2008 04:07PM EDT

i would rather trade than invest in Dell because of many uncertainties. there are many companies with more potentials than Dell. I would invest somewhere and trade this stock.

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