Dell warns third-quarter sales hurt by Europe
(UPDATE: Adds share price paragraph 6, byline, details throughout)
By Nicole Volpe
NEW YORK, Oct 4 (Reuters) - Dell Computer Corp. (NasdaqNM:DELL - news), the world's No. 2 personal computer maker, said on Wednesday its third-quarter sales were coming in about 3 percent below what it expected due to weak demand in Europe, knocking the one-time ``must own'' stock further off of its pedestal.
``There has been some macro-psychology at play with the weak euro,'' said Chairman and Chief Executive Michael Dell, speaking to analysts at a meeting in Round Rock, Texas. ``People (in Europe) have been significantly less inclined to make expenditures in terms of technology.''
The company issued the warning after the close of trade. Shares fell $3-3/16 to $25 in after-hours trade. Shares closed down 3/8 at 28-3/16 on the Nasdaq on Wednesday - lows the stock has not seen in two years.
Dell, which also cited slow growth in sales to small business customers, was only the latest tech victim of weak demand in Europe. Chip giant Intel Corp. (NasdaqNM:INTC - news) and stylish personal computer maker Apple Computer Inc. (NasdaqNM:AAPL - news) both said recently they saw slack sales in Europe.
``If the softness persists into the fourth quarter, Dell's full-year revenue could be $32 billion, an increase of about $7 billion, or 27 percent, from sales for fiscal 2000,'' the company said in a statement released at the meeting's start.
The company has previously said it expected to deliver 30 percent sales growth for the full year, already a step down from its traditional growth rates of above 50 percent that made Dell a magic stock for investors for the second half of the nineties.
Dell said it remains on track to meet the company's profit expectations for the third quarter, although fourth-quarter per-share earnings could be one to two cents below company targets.
The consensus estimate among Wall Street analysts was for Dell to report earnings for the fourth quarter ended January 2001 of 28 cents per share compared with 15 cents in the same year-earlier quarter, according to a First Call/Thomson Financial survey.
The third-quarter consensus was 25 cents per share compared with 18 cents per share from the same period a year ago. |
