Dell shares tumbled 9.4 per cent yesterday after the world's biggest PC maker cut its third-quarter revenue forecast, blaming disappointing sales to consumers in the United States and Britain.
The warning follows on the heels of a disappointing second quarter, when Dell's revenue missed analysts' forecasts after the company cut prices aggressively on entry-level PCs in the United States. Dell is struggling to raise prices without losing business from customers looking for big values.
In an announcement after the close of US markets on Monday, the company said it expected to report third-quarter revenue of $13.9 billion (€11.6 billion) - below its earlier forecast of $14.1 billion to $14.5 billion, and below analysts' $14.3 billion estimate.
Dell also said that it expected fiscal 2006 third-quarter profit before charges of 39 US cent, missing analysts' average forecast by a cent.
The company also plans to take a third-quarter charge of about $450 million - about 14 cent per share - for the cost of repairing some customers' computer systems as well as for expenses related to cutting jobs and restructuring units.
