Weak Dell Sales Forecast Sparks Fears of Slowdown

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Dell has forecast lower-than-expected revenue for the third quarter due to the economic slowdown and decline in PC demand.

For the third quarter, the company expects revenue between US$23.8 billion and US$25 billion, below the US$26.34 billion estimated by analysts.

Although the company used its enterprise-oriented business to make up for the shortfall caused by the decline in PC demand, its executives were cautious about the outlook for the unit, which generates nearly half of its revenue.

Dell’s revenue growth in the second quarter was its slowest in more than a year and a half, hurt by the strong dollar and the flare-up of COVID-19 in China, the company’s second-largest market.

Consumer revenue declined 9% but was offset by a 15% increase in commercial business as companies placed orders to advance the era of hybrid work. Infrastructure solutions group which houses the company’s storage business, grew 12% to $9.5 billion. Dell posted adjusted earnings of US$1.68 per share on revenue of US$26.43 billion, a jump of 9%.

“There’s caution around future hiring, trade-offs within their IT budgets given the macroeconomic uncertainty, customers reducing the size of orders and buying for only immediate requirements,” said co-Chief Operating Officer Chuck Whitten.

The sources for this piece include an article in Reuters.

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