Dell Earnings Fall Short as PC Maker Keeps Thinking Inside the Box

Dell Earnings, R&D Facility
Dell Earnings, R&D Facility

Dell's (DELL) not well.

There was a time when folks were snapping up the company's desktops and laptops. Dell's customer-direct model made it the envy of the consumer tech industry.

Well, no one's ringing Dell's bell these days.

The PC maker saw its profitability drop sharply as sales tumbled 11% to $13.7 billion in the quarter just ended. Wall Street was banking on a decline in the report after Thursday's close, but analysts were forecasting $13.9 billion in revenue.

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It's easy to see the problem. Folks are flocking to tablets and smartphones. Those devices can't do the heavy computing work that sturdy standalone desktops and portables can accomplish, but for casual computer users who were only firing up their PCs to surf the Web, stream media, and check in on social networking websites, tablets and smartphones are a perfect fit.

It also isn't easy to stick a desktop or even a laptop in your pocket.

The bad news for Dell is that it's not a very prominent player in the "good enough" mobile computing devices that consumers are craving.

Other things worth watching

• Not every report that came out after Thursday's market close was a disappointment. Gap (GPS) is actually raising its outlook after strong sales and a better than expected profit is breathing life into the company behind not just its namesake stores, but also the Old Navy and Banana Republic apparel chains.

• The beginning of the end for Team Edward and Team Jacob -- at least as far as theatrical releases go -- kicks off today. "The Twilight Saga: Breaking Dawn - Part 2" begins its multiplex run today. You may not necessarily find yourself battling diehard fans at the theater. They camped out on Thursday night for the first wave of screenings. However, exhibitors are hoping the patrons turn out for the fifth and final film in the four-book series of young vampires and werewolves in love. Hollywood can use the boost. It's been a dreadful past couple of years at the box office. There are certainly pockets of multiplex cheer. Last week's debut of "Skyfall" -- the latest installment in the James Bond series -- was a major draw. However, after seeing the number of tickets sold domestically decline in 2010 and 2011, it's going to take a strong holiday push to break that trend in 2012.

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article.

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Originally published