Dell puts on brave face after worst sales in years

Dell announced that it expects its second quarter results to meet earlier estimates, but has warned job cuts will cost the company far more than expected.

This means the company will actually miss its own bottom line predictions.

Dell said in May that the 3,000 to 4,000 job cuts it announced earlier in the year will result in a one-off charge of $250m to $350m, but yesterday it changed this figure to $700m.

The company said the larger charge was also because of the writing down - or lowering of value of some assets - including investments by its venture capital unit, Dell Ventures.

When second quarter results are released on 16 August, Dell said it expects to report sales of $7.6bn and earnings of 16 cents per share, down from 22 cents a share for the same period a year ago.

This announcement follows hard on the heels of reports from Dataquest and IDC that worldwide PC sales fell in the second quarter.

Dataquest figures revealed PC shipments fell 1.9 per cent from the same period a year ago, to 30.4 million units, while IDC reported international sales were down two per cent, to 29.8 million units.

It is the first time since 1986 that worldwide PC sales have declined.

Dell shares jumped on the results forecast, up four per cent to $28.38 when the Nasdaq closed yesterday evening.