Dell Inc. (Nasdaq: DELL) shares tumbled as much as 13 percent in early Wednesday after the company forecast fiscal second-quarter revenue that missed analysts’ estimates.

Revenue for the period ending in July will be $14.7 billion to $15 billion, the world’s No. 3 PC manufacturer behind HP (1) and Lenovo (2) said in a statement, compared with the average $15.4 billion analyst estimate compiled by Bloomberg.

The forecast, paired with a first-quarter sales and earnings miss, pointed to problems endemic to Dell, Steve Felice, Dell’s president, said in a conference call. The sales team focused on individual products instead of packages of hardware and software, he said. A reorganization is underway aimed at lining up staff that can sell a complement of Dell products, instead of specializing in individual ones.

“In my own interactions with larger customers, we are seeing a delay and pause in spending activity,” Chief Executive Officer Michael Dell said during the call yesterday with analysts. PC sales will remain sluggish because businesses won’t move immediately to Microsoft Corp.’s Windows 8 operating system when it’s introduced later this year. “Corporations are still adopting Windows 7.”

Mobile Competition

Shares slumped as low as $13.13 in late U.S. trading yesterday. The stock has climbed 3.1 percent this year. In German trading, the stock today dropped as low as the equivalent of $13.01 and was down 12.3 percent as of 9:15 a.m. in Frankfurt.

Demand for Apple Inc.’s iPhone and iPad and other mobile devices are eating into Dell’s notebook sales. The world’s third-largest personal computer maker lost share in the global PC market in the first three months of the year, according to market researcher Gartner Inc.

‘Double-Edged Sword’

Fiscal first-quarter net income was $635 million, or 36 cents a share, compared with $945 million, or 49 cents, a year earlier. Sales fell 4 percent to $14.4 billion, compared with an average $14.9 billion estimate. Profit excluding some items was 43 cents a share, while the average projection was 46 cents.

Gross margin, or the percentage of sales remaining after deducting costs of production, was 21.3 percent in the first quarter, compared with a 22 percent estimate. A year earlier, gross margin was 22.9 percent.

“They’re focused on profitability,” said Shaw Wu, an analyst at Sterne Agee & Leach Inc. in San Francisco. “That’s a double-edged sword. Sure it can help your margins somewhat, but you’re also shrinking your installed base.”

While Dell didn’t change its earnings-per-share forecast for the year, Chief Financial Officer Brian Gladden told analysts on the call there’s “clearly pressure on the total year outlook.”

Waiting for Windows

Global PC shipments in the first quarter increased about 1.9 percent, according to Gartner. Hewlett-Packard Co. remained the market leader, accounting for 17.2 percent of worldwide PC shipments, Gartner said. Lenovo Group Ltd., Dell, Acer Inc. and Asustek Computer Inc. rounded out the top five. Apple ranked third in the U.S., behind Hewlett-Packard and Dell.

Shipments of business PCs slumped in April and consumers are holding off on buying machines until Microsoft releases its Windows 8 operating system, expected in the last quarter of this year, Morgan Stanley analyst Katy Huberty said in a May 17 research note.
To diversify beyond PCs, Dell is selling more of its own data-storage and networking gear, instead of relying on products made by companies such as EMC Corp.

Dell and rival Hewlett-Packard are also counting on sales of thin, lightweight laptops called ultrabooks to spur revenue. Dell’s newest ultrabook, called the XPS 13, sells for $999 on the company’s website.