Dell issues profit warning as aggressive pricing hits hard

Dell has issued a profits warning, citing a slowing worldwide market and aggressive pricing as contributory factors.

Second quarter fiscal 2007 revenue, which will be announced on August 17, is now expected to be approximately $14 billion with EPS of around 21 to 23 cents, which is much lower than originally expected.

"All of our initiatives are focused on providing the best value, experience and products to customers every day, which will maximise shareholder value over the long term," said Kevin Rollins, chief executive officer, Dell.

During Dell's annual meeting this month, Rollins told shareholders that the company's direct model continued to be successful and is increasing its revenues outside of the US.

"The direct model remains a powerful differentiator for our global business, providing a unique relationship with our customers and a clear cost advantage over our competitors," he said.

This latest profits warning is the second revisal Dell has made to its financial results this year. In May, Dell revised its first quarter GAAP earnings per share from 36 to 38 cents to a more modest 33 cents.

At the time Rollins said: "The competitive environment has been more intense than we had planned for or understood."

Maggie Holland

Maggie has been a journalist since 1999, starting her career as an editorial assistant on then-weekly magazine Computing, before working her way up to senior reporter level. In 2006, just weeks before ITPro was launched, Maggie joined Dennis Publishing as a reporter. Having worked her way up to editor of ITPro, she was appointed group editor of CloudPro and ITPro in April 2012. She became the editorial director and took responsibility for ChannelPro, in 2016.

Her areas of particular interest, aside from cloud, include management and C-level issues, the business value of technology, green and environmental issues and careers to name but a few.