Personal computers and laptop maker Dell Inc.(NASDAQ:DELL) on Tuesday reported dismal second quarter results sending it shares down more than 6 percent in the opening session on Wednesday.
For the quarter ending in July, the company said it had earned $732 million or 42 cents a share, an 18 percent decline from the $890 million or 48 cents a share it had earned in the year-ago period.
Excluding costs incurred during the quarter not related to its core business, the e company would have earned 50 cents a share, slightly above analyst estimates of 45 cents.
Revenue for the period fell 8 percent from last year to $14.5 billion. That was nearly $200 million below analyst forecasts.
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Dell, in common with other manufacturers of personal computers, has been facing competition from tablet PC makers as more people shift to mobile devices for their everyday computing needs.
Apple's iPads especially have changed the way that people are connecting and working on mobile computing devices.
The mobility division of the company saw its sales dip 19 percent from a year earlier while sale of desktops fell 9 percent. Combined revenues from desktops and laptops were down 14 percent, the company said.
"The revenue deterioration we saw during the quarter was clearly above anything we expected," Chief Financial Officer Brian Gladden told analysts during a conference call.
Dell has also diversified into making mobiles and tablets with its Streak range of devices but has not been able to make much of a dent in a market dominated by Apple, Samsung and Nokia.
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The company, which is the No.2 maker of laptops and desktops in the United States, is banking on the release of Windows 8, Microsoft's revamped new operating system, and there are expectations that this upgrade will induce more people to buy devices that are not made by Apple.
Dell shares fell 73 cents, or 5.67 percent, to $11.61 in pre market trading.
It expects its adjusted earnings for 2012 at $1.70 per share, down from its previous forecast of $2.13 per share. Revenue in the current quarter ending in October is expected be 2 percent to 5 percent below the figure posted in the just-completed quarter.