It looks like Dell
Chief rival Hewlett-Packard
While Intel reported a 17% jump in sales from one quarter to the next, Dell had to settle for a far less impressive 1% sequential sales boost. At $12.9 billion, Dell's revenue shrank 15% from the year-ago period. The story gets even more sordid on the bottom line, where Intel's earnings moved from red ink to black in the quarter-over-quarter comparison and stayed nearly flat year over year. Dell made money, but at $0.17 per share, it was less than half of the profits seen last year and even a drop from last quarter's $0.24 per share. And if you don't trust Intel as a proxy, IBM
Dell's management pointed out that corporate IT spending is thawing after a deep freeze, which should be good for Dell because the company makes 80% of its sales to commercial enterprises. Business is improving from month to month, and Dell hopes to keep that trend going as businesses start to refresh their technology budgets and adopt the new Microsoft
But none of that can explain why Dell is doing so much worse than Intel, and by extension, compared with the larger computer sector. The only explanation that seems to make any sense is if Dell is losing market share to rivals like HP and Lenovo, not to mention IBM in the oh-so-important enterprise market. So I will expect independent reports and earnings from the other guys to bear that story out over the next few weeks.
Dell's stock is down 10% today. Some might call it a buy-in opportunity, but I think the company deserved this slap to the face. The comments box below can't wait to hear what you think.