Updated from 4:50 p.m. EDTDell ( DELL) shares dropped late Thursday after the No. 1 PC maker slightly missed Wall Street's second-quarter sales target and offered third-quarter targets below expectations. Dell said price pressures hurt the second quarter, but the Round Rock, Texas-based company also claimed to gain market share. Shares fell 7.6% after hours to $36.57 on Instinet after closing the regular session off 0.6% to $39.50. "Our strategy is unchanged, and we believe it is the right one for current industry dynamics," said CEO Kevin Rollins during a post-release conference call. He acknowledged pricing pressure on low-end consumer products and sluggish spending by the U.S. federal government. "I don't think the competitive environment has changed a lot," Rollins said. "The lower
Gross margin held flat sequentially at 18.6%, but was up from 18.2% in the same quarter last year. By product line, desktop PC sales rose 2% to $5.1 billion from the same quarter last year, mobile sales rose 20% to $3.4 billion, server sales rose 9% to $1.3 billion, software and peripheral sales expanded 35% to $2 billion, enhanced services sales rose 41% to $1.2 billion and storage sales rose 26% to $400,000. From the first quarter, desktop and storage revenue dropped while other products booked increases. For the third quarter, Dell predicted earnings between 39 and 41 cents a share on sales of $14.1 billion to $14.5 billion. Analysts had predicted third-quarter earnings of 41 cents a share and sales of $14.6 billion. Rollins said the company's light targets are due in part to uncertainty about what spending will be like by the federal government. He said the company plans to focus more during the quarter on upselling into profitable price points.