Dell Falls on Poor Earnings

Dell Inc (DELL) reported today a 54% decline in income for it’s most recent quarter along with a 15% reduction in revenue. The company missed estimates on both fronts and the stock was battered 10% lower on Friday. The bad report has made some investors question the technology leadership and the overall market rally.

Opposite of Other Tech Giants

These earnings are in contrasts to a number of other technology companies that have beaten estimates and performed well during the 3rd quarter. HP, Intel, and IBM have all done well with HP and Intel both operating in the consumer PC space. Michael Dell stated during the announcement that the company has seen consumer strength in the last 30-60 days. This would correspond with the beginning of holiday shopping in the US.

Consumer Buying

Dell has not suffered because of the consumer in the last quarter but because of it’s reliance on business spending and government contracts. Both business and government revenue declined for Dell. Laptops and Netbooks have become hot items this year and Dell is missing some of this trend. At the same time Dell is moving into the services market with its recent acquisition of Perot Systems.

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