Dell Shares Expected to Fall Heavily Amid Slumping European Sales

Dell's warning that its European sales are weak has reignited fears of slumping demand across the industry, with the company's shares likely to take a hit today. The PC maker's sales are running 3 percent lower than expected due to weak demand in Europe and disappointing sales to small business customers globally. Despite Dell's optimism about meeting profit targets for the third quarter, investors have been selling computer stocks, which could lead to a significant decline in Dell's shares today.

Key Takeaways:

• Dell's European sales are weak, leading to a 3 percent drop in sales compared to expectations.
• Sales to small business customers globally are also disappointing, contributing to the decline.
• Despite the warning, Dell is still optimistic about meeting profit targets for the third quarter.
• Investors have been selling computer stocks, citing a massive profits warning from Apple and disappointing sales in Europe by Intel.
• Knight Trading, the largest market-maker on Nasdaq, has warned that third-quarter revenues will be less than half current expectations, with profits pared to 13 to 16 cents a share.

Statistics:

• 3%: the percentage drop in sales compared to expectations due to weak demand in Europe.
• -22%: the decline in Intel shares after its warning about disappointing sales in Europe.
• -50%: the decline in Apple shares the day after issuing its profits warning.
• 13 to 16 cents: the estimated third-quarter profits per share for Knight Trading.
• 31 cents: the expected third-quarter profits per share before Knight Trading's warning.

Sources:

• The Times, 2000.
• Dell press release.
• Apple press release.
• Intel press release.
• Knight Trading press release.