Dell (Nasdaq: DELL) lost 9 percent Thursday after announcing its third downward revision on sales this year. Analysts lowered their ratings and expectations for the PC maker into 2002.
Shares were down 2.44 to 25.75 Thursday morning. After the closing bell Wednesday, Dell said its third quarter revenue is growing slower than expected at about 7 percent sequentially due to weak sales in Europe.
The PC maker may have set a trap for itself with its insistence on being judged by its growth rate relative to the PC industry. It's just the latest in a slew of high-tech companies -- including Apple (Nasdaq: APPL) and Intel (Nasdaq: INTC) to issue a warning.
Dell was downgraded to "market perform'' from "buy'' by analyst Walter J Winnitzki at Chase H&Q.
The stock was maintained "strong buy'' by analyst Kimberly Alexy at Prudential Securities. The 12-month price target was cut to $43 from $68 per share
Bear Stearns maintained its "neutral" rating on the stock, but said on Thursday it cut its outlook for earnings per share (EPS) to 92 from 94 cents. Analyst Andrew Neff also cut fiscal 2002 earnings outlook to $1.05 from $1.20 a share.
"In our view, there is potential for further pressure on the estimates since we expect to see a more aggressive pricing environment over the next few months,'' Neff stated in a report.
Compaq (NYSE: CPQ) was also down 5 percent, or 1.34 to 27.5. ABN AMRO analyst Bill Shope reiterated his "hold" rating Thursday, and his third-quarter earnings forecast of 29 cents a share. Shope said slowing demand for personal computers and Dell comment that it would continue to price more aggressively added to his "near-term concerns about Compaq."
Reuters contributed to this report.