Dell Sees Stability, Street Sees Softness

Dell (DELL Quote) is trying to call a bottom in IT spending. But modestly in-line projections failed to spark confidence.

The Round Rock, Texas PC maker offered a financial update Monday calling for sequentially improved sales, which would be in line with Wall Street's expectations. The gains, however, come with a narrowing of gross margins, says Dell, blaming expensive parts and heated price competition.

Dell vowed to keep pushing toward its goal of eliminating $4 billion in costs. And looking ahead at the long-range forecast, Dell says it expects sales to grow between 5% and 7% annually.

That is slightly higher than the 4.7% growth rate analysts are expecting for 2010.

Dell provided the update ahead of its analysts' day conference Tuesday.

"One of our strengths is understanding customer needs and meeting them with great technology and services," CFO Brian Gladden said in a press release Monday. "To do that best, we're investing to expand on existing capabilities and extend into new areas, while smartly and efficiently managing our costs and assets."

Dell shares fell 44 cents, or 3%, to $12.58 in afterhours trading Monday.