DELL Growth Prospects to Remain Weak

First Global US Research downgrades Dell Inc (NASDAQ: DELL) to “market perform.”

DELL’s Q3 FY10 results had shocked the market, as the company had delivered one of its weakest performances over the past few quarters, First Global US Research said. With DELL’s sales declining 15% y/y and showing a marginal 1% sequential rise, the company’s numbers for the quarter had failed to reflect the healthy improvement in the economic environment, First Global US Research added.

Although global economy is stabilizing, Dell continues to lose market share, according to First Global US Research. While DELL is looking forward to the next PC refresh cycle for improvement in performance, First Global US Research believes that the cycle will be slow to take off. According to First Global US Research, enterprise spending still remains weak. First Global US Research expects Dell’s growth prospects to remain weak going forward due to the company’s weak performance in the Consumer segment and slow recovery in Enterprise spending.

First Global US Research has reduced its proforma EPS estimates for Q4 2010 from $0.28 to $0.23, respectively.

Dell’s share price has dropped by 1.69% to $14.54 in the morning trade.