Dell's forecast slumps below Wall Street's expectations

Tinbox maker Michael Dell is predicting a first-quarter revenue below what the cocaine nose jobs at Wall Street think his company should be earning.

Dell’s prediction is promoting fears the PC industry has not fully emerged from its downturn and sending the company’s shares falling by more than four percent.

Dell projected sales would be down seven percent this quarter from the previous quarter. Dell had thought it would make $16 billion and now thinks this will be only $14.9 billion, below the average forecast for roughly $15.2 billion.

It was not all bad news for Dell. The outfit’s corporate business unit did really well with sales up by five percent but this was offset by the weakness in the division that caters to public sector businesses which slumped by a percent.

Chief Financial Officer Brian Gladden said profit margins for the quarter were hurt by a combination of weakness in US public spending, discounting of the leftover inventory of its previous generation phones and the lingering impact of the Thailand flood on its product mix.

Gladden told Reuters  that Dell did not get the mix of drives that it wanted and forced it to sell less configured lower-end systems. This stopped it selling the higher margin more highly configured systems.

He thinks that hard disk drive problems will continue this year.