Dell, the Round Rock, Texas-based computer maker, reminds investors this morning that it took a conservative tone a few weeks ago when it reported its quarterly earnings. Today, the company
took it a step further:
When Dell announced Q2 financial results on Aug. 28, 2008, it reported continued conservatism in IT spending in the U.S., which had extended into Western Europe and several countries in Asia. The company is seeing further softening in global end-user demand in the current quarter.
Dell also said it "expects to incur costs as it realigns its business" to be more competitive, to cut headcount and invest.
Without more information, it's difficult to say if Dell's situation is a lagging indicator or a leading indicator.
For much of the economic slowdown this year,the IT industry has remained comparatively unscathed - - with companies like Intel and Hewlett-Packard enjoying strong quarterly reports and Dell able to say its PC shipments are outgrowing the market.
Still, Dell's statement Tuesday comes on the heels of a 504-point drop in the Dow Jones Industrial Average yesterday, and amid lots of skittishness on Wall Street. At the same time, though, oil prices - - which had been a drag on the U.S. economy and a leading factor in inflation - - have been dropping and began Tuesday below $93 per barrel.
