USB Piper Jaffray Cuts Dell Outlook

Fourth quarter earnings from the computer maker disappointed as a highly competitive landscape put profits under pressure

USB Piper Jaffray lowered its revenue and profit estimates for computer maker Dell (DELL ), whose aggressive pricing has put profits under pressure.

Analyst Ashok Kumar said the company's revenue miss was a result of continued weakness in small- and medium-sized business segments. He said gross margins are now expected to come in at about 18%, 240 basis points below his prior estimate. Kumar said Dell needs to focus on the enterprise segment to offset secular decline in personal computer hardware profitability.

Kumar cut his 2002 revenue estimates to $36.9 billion, down from $38.7 billion and he lowered his earnings per share target to $0.90, down from $1.14. The analyst now sees fiscal year 2001 earning sper share coming in at $0.83. Kumar has a $35 price target on Dell stock.

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