Dell Computer has warned analysts that its revenue and earnings will fall short of expectations for the second quarter in a row due to a shortage of the Intel based processors that power its PCs.
Although, on issuing its preliminary results on Wednesday, the supplier said that sales for its fiscal fourth quarter ending 28 January were up 30 per cent to $6.7 billion, the figures were much lower than even the most conservative analysts' estimate of $7.1 billion.
They are also below last year's growth rate in the high 30 per cent range and a historic run rate of 50 per cent and more.
Dell claimed the main reason for the shortfall was that Intel could not provide it with enough processors to meet demand, although it also admitted it had suffered some delay in sales to corporate customers due to the Year 2000 problem.
Dell is the only PC maker among the majors to still rely exclusively on Intel. It would appear to be paying the price for the chip maker's failure to produce enough high-end Pentium IIIs.
As a result, Michael Dell, the company's founder and chief executive, implied that it might look to second source processors elsewhere. "Certainly we evaluate alternatives on an ongoing basis," he said.
But Intel itself had few words of comfort. A spokesman said it would continue having difficulty meeting demand for its Pentium III and Celeron processors over the next few months.
The weaker sales will also affect Dell's profits, however, and the company's founder said they would be around 20 per cent less than current estimates of $0.21 per share. This means that when the supplier reports its full results on 10 February, it expects to see profits of about $430 million or $0.16 per share.
To make matters worse, Dell said he did not foresee any immediate improvement, with revenue growth remaining in the 30 per cent range and margins in the low to mid seven per cent range.
The news sent Dell's stock tumbling in after hours trading from just over $40 to $36, and analysts believe the news will have a negative impact on the market when trading opens again today.
Cotton seedling freezes to death as Chang'e-4 shuts down for the Moon's 14-day lunar night
Fortnite easily out-earns PUBG, Assassin's Creed Odyssey and Red Dead Redemption 2 in 2018
Meteor showers as a service will be visible for about 100 kilometres in all directions
Saturn's rings only formed in the past 100 million years, suggests analysis of Cassini space probe data
New findings contradict conventional belief that Saturn's rings were formed along with the planet about 4.5 billion years ago