NEW YORK ( TheStreet) -- Dell's (DELL - Get Report) fiscal second-quarter came in light of expectations, but its third-quarter guidance has left investors wondering if the PC business will ever turn around.
As PC sales continue to be pressured by tablets, smartphones and mobile devices, Dell said it expects third-quarter revenue to fall between 2% and 5% sequentially. It also lowered full-year earnings guidance to at least $1.70 per share. Analysts surveyed by Thomson Reuters were looking for earnings of $1.90 a share.
Deutsche Bank analyst Chris Whitmore is concerned that the pent up demand for Microsoft's (MSFT) Windows 8 will not be enough to stabilize the PC results. "Although the Win 8 launch should drive some inventory restocking and pent-up demand into the holidays, we remain concerned that Win8 tablets and NBs (notebooks) are unlikely to catalyze a sustained PC demand cycle," Whitmore wrote in a research note. He rates Dell "buy" with a $16 price target.
Results, however, were not all bad with several units of the Round Rock, Texas-based company showing growth, most notably server and networking, which saw revenue growth of 14%. Calling this growth "robust," Brean Murray analyst Ananda Baruah took some comfort that this segment can offset some of the pressures in the PC market. "It is evident, that as companies pull back on discretionary PC purchases, they continue to invest in the data center, and we believe the strength in the ESS
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