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Dell results fall short of expectations

February 29, 2008|From the Associated Press

DALLAS — Dell Inc.'s fiscal fourth-quarter profit dropped 6.4%, falling short of Wall Street expectations, and the personal computer maker warned that more cautious spending by customers and higher costs could hurt its business.

The Round Rock, Texas-based company said it earned $679 million, or 31 cents a share, in the quarter ended Feb. 1, down from $726 million, or 32 cents, in the same period a year earlier. Analysts surveyed by Thomson Financial had predicted profit of 36 cents a share.

Sales at the world's No. 2 PC maker increased 10.5% to $15.99 billion, but that was below the $16.27 billion that analysts had expected.

Dell shares rose 10 cents to $20.87 before the report was released. In extended trading, they were down 87 cents, or 4%.

Chief Financial Officer Donald Carty said the company had restored growth in key areas, including notebook computers and emerging markets. But he acknowledged that Dell "saw a little slowing down" in its big U.S. accounts, particularly financial-services customers.

Dell built its business by selling computers directly to companies and consumers, but has started selling through retailers including Best Buy Co. and Wal-Mart Stores Inc.

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