Dell CEO Michael Dell's conference call comments have been added to this story.
- PC maker Dell(DELL) reported adjusted earnings per share of 54 cents on sales of $15.66 billion for its fiscal second quarter.
- Analysts expected adjusted EPS of 49 cents on sales of $15.76 billion, compared to the 32 cents EPS on revenue of $15.5 billion reported in the year-ago period.
- Dell, whose shares are up 17% for the year on strength in its enterprise and small business sales, saw its stock close up 1.94% Wednesday at $15.80. Shares were down over 7% at one point in the after-hours session.
ROUND ROCK, Texas (
) -- Dell's
revenue miss and weak outlook sent the PC maker's shares into a tailspin after market close on Tuesday, despite posting a better-than-expected profit.
The PC maker's stock plunged more than 7% in extended trading when Dell reported revenue of $15.66 billion, below the $15.76 billion expected by analysts. Dell also revised its full-year revenue growth forecast to between 1% and 5% from its previous guidance range, which ran between 5% and 9%.
Excluding items, Dell earned 54 cents a share -- well above the consensus estimate of 49 cents a share.
The tech giant highlighted
in its enterprise business as a key driver of its profit growth. The company's enterprise solutions and services revenue, for example, grew 4% year-over-year to $4.6 billion, while its server and networking sales climbed 9%.
Revenue from the company's profit-rich services business was up 6% to $2 billion. Dell's storage business grew 15%.
Dell's consumer sales, however, were much less robust, growing just 1% year-over-year to $2.9 billion.
Speaking during a conference call to discuss the results, Dell CFO Brian Gladden acknowledged that U.S. consumer business was weaker than expected, and noted ongoing weakness in Europe and the U.S. Federal sector.
Dell CEO Michael Dell was also quizzed by an analyst about the company's decision to lower its revenue outlook. "It's clear that the demand environment was weaker and a lot more uncertain than what we had in our previous view," he replied, adding that a lot of U.S. Federal customers delayed their buying decisions.
The Dell chief, however, also explained that the firm has been "de-emphasizing" its lower-growth businesses, taking a short-term outlook hit to drive longer-term profits. "Net-net, that's a positive for us," he said.
--Written by James Rogers in New York.
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