SAN FRANCISCO (AP) — Dell Inc.’s decision to lower its full-year revenue forecast rattled investors, sending its shares down more than 7 percent in extended trading Tuesday. On a conference call with analysts, Brad Anderson, a Dell senior vice president, addressed some of the factors behind the downgrade.
QUESTION: I wonder if you could talk about the new revenue outlook, and with respect to the implications of the lower information-technology demand outlook out there and relative to de-emphasizing some of the lower-margin businesses.
ANSWER (Anderson): It’s clear that it’s weaker than we had in our previous view and we highlighted the U.S. and the developing companies, especially the consumer business. I would also say that the U.S. federal buying right now, we see a lot of push out but the pipeline looks good. The ability to close them have slipped month to month as we go throughout the year. The second element, obviously, is our continued work around de-emphasizing lower value business. I think that clearly is contributing, and results in lower revenue growth for the company. I think that’s net-net a good thing for us and contributing to profitability, and something that we will work through in the portfolio and mixing the business to higher value products.