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Last Updated: Tuesday, 9 May 2006, 04:43 GMT 05:43 UK
Dell's profits hit by price cuts
Dell notebook computer
Dell has cut prices in an effort to maintain sales growth
Dell, the world's largest computer manufacturer, has warned that its first quarter results will be worse than expected because of big price cuts.

The Texan-based giant now expects profits for the first three months of 2006 to hit 33 cents per share on revenues of about $14.2bn (7.6bn).

This compares with market expectations of 38 cents per share from $14.52bn.

Dell has cut prices to keep up sales growth, in response to competition from rivals such as Acer and Lenovo.

Its announcement pushed Dell shares down nearly 6% in electronic after-hours trading in New York.


"Dell has been an underwhelming name in technology over the past year, and this is an indication that will probably continue," said Michael James, a senior trader at Wedbush Morgan Securities.

Dell's shares are now down more than 30% compared with a year ago.

According to market estimates, Dell's share of the global PC market fell from 18.6% to 18.1% during the first quarter of 2006.

Dell will officially present its first-quarter results on 18 May.

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