Dell announced worse than expected second quarter financial results today. Earnings dropped 17 percent due to a global slowdown in IT spending:
Dell posted a disappointing drop in quarterly earnings and said spending cutbacks on information technology have spread from the United States to Western Europe and Asia, sending its shares down more than 10 percent.
"They're saying lower IT spending is spreading. That is evidence of a global slowdown in IT spending. This certainly isn't good news for tech overall. Dell's outlook is for slower spending - especially in Asia and Western Europe," said Tim Ghriskey, chief investment officer at Solaris Asset Management, who also noted weakness in Dell profit margins.
Dell reported a surprise 17 percent decline in quarterly profit on Thursday as the company suffered from tighter corporate spending in United States.
Net income for the fiscal second quarter ended August 1 fell to $616 million, or 31 cents per diluted share, from the restated year-ago net income of $746 million, or 33 cents per diluted share.
Excluding amortization and business realignment costs, Dell earned 33 cents per share, behind Wall Street's 36 cents per share target, according to Reuters Estimates.