April 1 (Bloomberg) -- Three years ago, Dell Inc.'s chief executive officer predicted the personal-computer maker might get an extra $20 billion in sales by 2009.

Instead Hewlett-Packard Co. racked up most of the revenue, boosting sales by $17.5 billion and wresting back the title of top PC maker from Dell. Former chief Kevin Rollins retracted his April 2005 prediction within a year, and was ousted by founder Michael Dell in January 2007.

The gaffe may make Dell, 43, reluctant to provide financial forecasts as he meets with 200 analysts tomorrow for the first time since Rollins made that prediction. Analysts said they will grill him on why his corporate makeover is taking so long and whether it's well-considered.

``They are moving from a laser-sharp strategy of direct-only sales to retail, to new products and to new markets,'' said David Daoud, an analyst with Framingham, Massachusetts-based researcher IDC. ``It's a lot of activity and it begs the question: Where is the company headed?''

Spokesman Jess Blackburn declined to comment before the two- day meeting at Dell headquarters in Round Rock, Texas, and a nearby hotel.

Dell said yesterday it is examining options including the sale of its financial-services business and expects to save $3 billion annually in the next three years by slicing costs from areas including design, manufacturing and materials.

Dell stopped providing quarterly forecasts in May 2006, saying it preferred to focus on longer-term goals. Four months later, the company canceled its analysts' meeting after disclosing that U.S. regulators were investigating its accounting. Dell halted all analysts' conferences and earnings calls until November, when it completed an internal accounting review that found executives had manipulated financial reports.

Dell's Pledge

Michael Dell pledged to turn the business around within 18 months after he took back the top job from Rollins. Since then, the stock has dropped 16 percent as U.S. consumer orders slumped in back-to-back quarters.

He isn't achieving the turnaround quickly enough, which has contributed to the stock's plunge, said Kimberly Caughey, a senior equity analyst at Fort Pitt Capital Management in Pittsburgh.

``Investors are a funny lot: They expect you to keep your word,'' said Caughey, whose firm held 192,156 Dell shares as of Dec. 31, according to data compiled by Bloomberg.

Investors have had more success with Hewlett-Packard, whose stock has gained 10 percent since January 2007. Dell rose 41 cents to $20.33 at 4 p.m. New York time in Nasdaq Stock Market trading. Hewlett-Packard advanced $1.93 to $47.59 on the New York Stock Exchange.

Dell has trailed Hewlett-Packard in PC shipments for six straight calendar quarters, and in Dell's most-recent quarter, the company unexpectedly posted a 6 percent drop in net income as sales missed analysts' estimates.

Playing Catch-Up

Hewlett-Packard, which had $86.7 billion in sales in fiscal 2005, surpassed $100 billion for the first time last year after selling more PCs to shoppers in stores, taking advantage of a network of 100,000-plus retailers.

Over the comparable period, Dell's revenue climbed less than 10 percent, topping $60 billion in the last fiscal year, the level Rollins expected to hit in 2005. Dell has since imitated Hewlett-Packard's strategy by lining up retailers including Wal- Mart Stores Inc. to sell PCs.

``I just want to hear them articulate a road map for how the consumer business will make money,'' said Brian Alexander, a Raymond James Ltd. analyst in St. Petersburg, Florida, who attended the 2005 meeting. ``What are the key reasons it's not making money today?''

Dell had a $40 million operating loss in the U.S. consumer unit in the quarter ended Feb. 1.

Color PCs

Dell has redesigned its computers to make them more appealing to consumers, offering models in Flamingo Pink and Ruby Red and adding some laptops in either soft touch finish or matte finish. In December, the company released its first all-in-one desktop PC, an aluminum-and-glass machine that combines a computer and monitor in one chassis.

The PC maker is selling more products for small businesses, whose orders are growing faster than large corporations, and pursuing bigger acquisitions. In January, Dell completed its largest purchase, the $1.4 billion takeover of EqualLogic Inc., to gain technology that links storage computers so they operate as a single device.

The company may need at least another year to complete a turnaround, said Bill Kreher, an analyst at Edward Jones & Co. in St. Louis.

``Dell is playing catch-up,'' said Kreher, who advises investors to hold the stock. ``We are encouraged by the momentum, but are these market share gains sustainable?''

To contact the reporter on this story: Melita Marie Garza in New York at mgarza4@bloomberg.net

Last Updated: April 1, 2008 16:06 EDT