Dell Q1 Results & Outlook Cause Concern

Dell's quest to reinvent itself as a company with a wider range of software and services hit its first setback as the company's first quarter results fell well below expectations and its outlook was weak.

The multinational technology firm will be particularly concerned by its negative growth in key areas: large enterprise revenue fell three per cent, public sector sales were down four per cent, and consumer revenue plummeted by a whopping 12 per cent.

Just as worryingly, growth in the heavily targeted emerging markets of Brazil, Russia, India, and China - known collectively as the BRIC economies -was a paltry four per cent. Overall earnings in the inaugural quarter were £404 million on revenue of £9.18 billion, down four per cent from last year.

Dell CFO Michael Bladden said the company had fallen short of its own expectations.

"Our first quarter results were mixed. There were some areas where execution was not as expected, and there were also market dynamics that created some headwinds. Our progress will not always be linear," he added.

The company's poor performance is regarded as a sign of the dangerous times faced by PC manufacturers, as both consumers and businesses increasingly opt to focus their spending on mobile technology.

"We are seeing some IT spending prioritize to purchase mobile devices. This is mostly a consumer dynamic that there is clearly some impact in areas of commercial as well," said Steve Felie, Dell's chief commercial officer.

Some analysts remain cautiously optimistic about Dell's individual prospects, saying it needs time to steady itself after going on an acquisitions bender recently.

However, most commentators articulate more widespread concerns about the industry and anxieties about corporate IT spending in particular; fears Dell's latest performance will only intensify.