Dell cites slowing sales, warns of lower Q2 profits

IDG News Service - Dell Inc. said yesterday that it expects profits for its second quarter to be lower than expected, blaming what it called "aggressive pricing and slow commercial sales worldwide."

The world's biggest PC vendor forecast second-quarter earnings of 21 cents to 23 cents per share on revenue of about $14 billion.

Analysts had been expecting earnings of 32 cents per share on revenue of $14.2 billion, according to Thomson Financial.

The computer maker, in Round Rock, Texas, is due to announce the actual results on Aug. 17.

The news comes two days after Intel Corp. reported a drop in revenue and a steep decline in profits for its own second quarter. It blamed slower growth in PC sales and increased competition from rival Advanced Micro Devices Inc.

A day later, AMD said it had grown both revenue and profit for the quarter, although its earnings still fell short of financial analysts' forecasts.

The worldwide PC market grew by 9.7% year-on-year for the second quarter, down from 12% growth for the first quarter, according to figures this week from IDC.

European growth fell in particular, IDC said, due to a build-up of inventory and also because of the World Cup soccer tournament, which distracted people from going out and shopping for PCs, according to IDC.

Apple Computer Inc. fared a lot better. Second-quarter sales of its Macintosh computers were up roughly 16% year-on-year, thanks partly to strong sales of laptops, IDC said.

Apple reported earnings on Wednesday for its fiscal third quarter that soundly beat Wall Street estimates. Sales of its iPod music players and Macintosh computers both increased sharply.