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Thai floods could impact revenues and prices, says Dell

Warwick Ashford

Computer maker Dell says flooding in Thailand is causing a worldwide shortage of PC hard drives that will last into the first quarter of 2012 and could impact the company’s revenues.

A wide range of computer-related and other industries have been hit by the floods as Thailand is a key production hub for many global firms, according to the BBC.

Dell earnings warning came as the world's third-largest PC maker announced revenues of $15.4bn and net profits of $893m for the third quarter of 2011.

The Dell share price fell by 2% in response to the earnings warning and the company’s failure to meet analysts’ expectations on earnings.

Amid Midha, Dell's president of South Asia and Asia-Pacific Japan, said on a conference call with analysts that the company purchased a significant amount of hard drives last month, but did not give any further details, saying the situation was “fluid”.

Brian Gladden, Dell's chief financial officer, told Reuters that the Thai floods may mean the company has to give priority to "higher-end customers and products".

The corporate market has overtaken the consumer market in importance for Dell, with earnings from large corporations up 4% to $4.5bn and consumer revenue down 6% to $2.8bn compared with the third quarter of 2010.

Gladden warned that the company may have to raise computer prices because the shortage of hard drives has pushed up the global cost.


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