AUSTIN, Texas – Dell Inc.’s journey toward business transformation has run into a rough stretch of road.

The Round Rock, Texas-based computer maker is shrinking this year in the face of weaker global demand for conventional PCs, intense low-cost competition from Asia and the rise of Apple Inc.’s successful smartphones and tablet devices.

Those factors all played parts in Dell posting second-quarter revenue last week of $14.5 billion, which was down 8 percent, or nearly $1.2 billion, from the same quarter a year ago.

Not only was the first half of the year difficult, but the company warned that the second half could be just as bad.

Dell gave guidance for the current quarter of a 2 percent to 5 percent sequential decline in revenue in what is normally one of the stronger sales quarters of the year. The company also officially lowered its earnings guidance for the current fiscal year to $1.70 a share or greater, from the previous guidance of $2.13 or greater.

Dell’s stock price closed at $10.91 a share Tuesday, down more than 40 percent since its peak for the year on Feb. 16.

Part of the reason for this year’s disruption is the PC industry’s transition to Microsoft’s latest operating system, Windows 8, which is expected to be launched in October.

 

Copy the Story Link