Dell warns on profits

Dell: Fourth-quarter earnings will be about 30% down on previous estimates

US computer stocks fell on opening after Dell Computer, one of the world's top personal computer makers, warned that its fourth-quarter earnings would disappoint investors.

It was the fifth time Dell had reduced its performance expectations in the past year and followed a string of similar profit warnings from high-profile rivals such as Apple Computer, Compaq Computer, Gateway and Hewlett-Packard.

Software firms including Microsoft have also suffered from a worldwide slowdown in PC sales that has been particularly marked in the US.

On the tech-heavy Nasdaq market, computer stocks were down 1.3% in heavy trading within a few minutes of the market opening.

Dell dropped almost a dollar to $24.81.

Earnings about 30% lower than expected

Dell said it now expected earnings for the quarter ending 18 January of 18-19 cents a share, compared with its previous estimate of 26 cents a share.

Analysts surveyed by First Call/Thomson Financial had, on average, been expecting earnings of 25 cents a share.

The company said it expected fourth-quarter revenue to be 25-27% improved on the year before at $8.5bn-8.6bn.

Revenue had previously been estimated at $8.7bn.

Dell is due to report earnings on 15 February.

Apple last week said it had slipped into the red for the first time in three years.

Microsoft reported earnings in line with reduced expectations.

Compaq is scheduled to report later this week.