Dell will take a $700 million charge in the second quarter for job cuts and other items, but said today earnings and revenues would fall within its earlier guidance.
The leading personal computer maker said it expected to post revenues of $7.6 billion for the second quarter before a $700 million charge for the previously reported job reductions, facilities consolidation, and asset impairments.
The charge roughly doubles the estimated hit Dell announced in May, when it said it expected to take a one-time pretax charge of $250 million to $350 million against its second-quarter earnings. The charge is mainly related to cuts of between 3,000 and 4,000 jobs and facility consolidation.
Dell has promised to be ruthless on cost control, as the personal computer market faces sluggish demand and a all-out price war.
Dell's direct sales model, which allows it to pass on falling component prices to its customers, is widely seen as giving the company the upper hand against its rivals even as overall PC demand weakens.
Dell, which took the top PC maker spot from Compaq Computer this year, plans to release full second-quarter results and provide third-quarter guidance on August 16th.