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Dell Says Things Are Getting Worse
Dell Is "Seeing Further Softening In Global End-User Demand" This Quarter

Adding to the Galveston-like carnage that is Wall Street, Dell Tuesday recalled its warning of only – note only – three weeks ago when it posted its earnings-frayed Q2 results that the lousy American economy was spreading to Western Europe and parts of Asia and said it’s getting worse – or in its words, it’s “seeing further softening in global end-user demand” this quarter.

The market promptly carved almost 10% off Dell’s share price to $16.34.

The company said it’s gonna keep doing what it’s doing in the expectation of moving more units than the industry average this half – like it did in the first half (albeit at depressed price war ASPs) – but that it expects to incur costs. It characterized the benefits of any further cost-cutting it does like more job cuts as long-term.

In its words, “The company expects to incur costs as it realigns its business to improve competitiveness, reduce headcount and invest in infrastructure and acquisitions, but is committed to working aggressively on cost initiatives that will benefit its P&L over time with improved growth, profitability and cash flow.”

It’s previously pledged to trim $3 billion in annual costs over three years and has recently decided to sell its factories.

Dell’s earnings were off 17% in its second quarter largely because it bought market share by lowering its prices. HP, on the other hand, the more diversified company Dell’s competing against, has said nothing about weakening IT spending.

About Maureen O'Gara
Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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