Paul Kedrosky: " Speak Dell
Dell blew up in after-hours tonight, announcing it would miss first-quarter earnings and that it was taking down the forecast. CEO Kevin Rollins had the following opaque offering by way of explanation:
'During Q1 we continued to execute on our strategy to reinvigorate growth by making investments in our support infrastructure and product quality and by accelerating pricing adjustments. We are committed to delivering industry leading value to our customers, which ultimately results in industry leading growth for the company.'
I know what you're thinking. You're thinking, What the hell does that mean? I speak Dell, so here is my translation:
During Q1 we tried to fix our support problems in hopes that would spike growth in the crummy PC market, but that didn't work so we tried to save the quarter by cutting prices earlier and more than expected. Trouble is, those bastards at HP cut prices too, which made us drop prices further. Now we're left with losing money on PC sales and trying to make it up on volume."
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