Dell's Earning's Disappointment Shakes Wall Street

The news of Dell's disappointing earnings report shook Wall Street as the trading day opened with overnight losses. The current US economy has created a difficult environment for retailers, especially those producing big ticket items. Not only were individual consumers tighter with their wallets in the last quarter, corporations have been guarded in their spending, as well, cutting costs in areas such as technology until their budgets can be shored up.

While sales slump domestically, Dell is seeing a moderate increase in overseas sales, admitting that the US may be the slowest growing market in 2008. Not all segments of the Dell product line suffered, though. Notebook sales were up, and the sale Dell's non-PC products also maintained a healthy level. However, there was too much working against the computer-giant. Competition in the marketplace is fierce with Hewlett Packard maintaining their top position in the sector and Apple continuing to increase their market share.

To remedy the current deficit, Dell plans on aggressively cutting costs, and probably eliminating additional jobs. In the past year, Dell eliminated 3,200 jobs, but made it evident that they intended to cut as many as 8,800 jobs, 10% of their workforce, before layoffs are complete.

Dell remains optimistic that after the cost-cutting efforts have gone into effect, Dell will reemerge as a leader in the consumer PC market.

by Hillary Mark |  02/29/08  |  Stocks: DELL,