Dell Revenue Flat, Warns on Full-Year Outlook

Dell Inc's quarterly revenue just missed Wall Street estimates, and the world's No. 3 personal computer maker warned that full-year revenue could be hurt by an industrywide shortage of hard drives.

Uncertainties surrounding the economy and the hard drive shortage means that Dell's fiscal 2012 full-year revenue is tracking at the lower end of its growth forecast of 1 to 5 percent, the company said.

Investors fear a slowdown in PC manufacturing late this year and in 2012 after flooding in Thailand severely disrupted production of hard drives, a key component in computers.

To the that extent we see higher (drive) prices we'll also see some offsets in other components and we're going to do everything we can to protect our customers. But maybe in some cases we do have to raise our prices, Chief Financial Officer Brian Gladden told Reuters in an interview.

The shortage of hard drives will force Dell to prioritize toward higher-value customers and products, Gladden said.

During the third quarter, desktop PC revenue slid 6 percent to $3.4 billion as Dell's sales to consumers fell 6 percent.

Gross margins slipped to 23.1 percent from 23.2 percent in the prior quarter, but rose from 20 percent a year earlier.

Dell said revenue in its fiscal third quarter was essentially flat at $15.36 billion, but slightly lower than the average analyst estimate of $15.65 billion according to Thomson Reuters I/B/E/S.

Analysts on average had projected a 1.6 percent climb in Dell's fiscal 2012 revenue to almost $62.5 billion.

Net earnings rose to $893 million, or 49 cents a share, from $822 million, or 42 cents a share, in the year-ago period.

Excluding items, Dell earned 54 cents a share, better than the average analyst estimate of 47 cents.

Dell's large enterprise business increased sales 8 percent in the quarter as corporations continued to upgrade aging hardware.

Shares of Dell slid 2 percent to $15.32 in extended trade, after closing at $15.63 on Nasdaq.