Dell’s outlook disappoints as PC market falters

ROUND ROCK, Texas, Wed Aug 22, 2012 – Dell Inc. warned of a challenging second half and slashed its full-year earnings outlook as customers cut back on computer purchases ahead of the launch of Microsoft’s Windows 8 software, sending its shares down more than 4 percent.

Dell – once the world’s top PC maker and a pioneer in computer supply chain management – is struggling to defend its market share against Asian rivals like Acer Inc and Lenovo, and the fast-growing adoption of tablets like Apple Inc’s iPad.

Founded by CEO Michael Dell, it is in the midst of a turnaround, juggling acquisitions to bolster growth with the need to fatten margins by trimming expenses even as global tech spending appears to be slipping. In May, it warned that global tech spending is weakening faster than anticipated.

The No. 2 U.S. PC maker on Tuesday forecast revenue would slide 2 percent to 5 percent in the fiscal third quarter from the second, to $13.8 billion to $14.2 billion. That lagged Wall Street’s target of $14.85 billion.

It is predicting earnings per share of “at least” $1.70 for fiscal 2013, compared with a previous forecast for more than $2.13.

Sealy loses perch as rivals tap into Baby Boomers’ health fears

TRINITY, N.C., Fri May 11, 2012 – More than a hundred years ago, U.S. mattress maker Sealy Corp. launched an advertising campaign with the line, “Sleeping on a Sealy is like sleeping on a cloud.”

That line and several mattress innovations helped make Sealy the No. 1 U.S. mattress brand, a position it has held for decades.

However, the company is now in danger of being toppled, as it struggles to tap the surging demand for specialty beds that are wooing aging Baby Boomers with claims of their health benefits.

Sealy’s sales have barely budged since 2009, while new products backed by catchy marketing and an improving economy have fueled explosive growth at Tempur-Pedic International Inc. and Select Comfort Corp., which specialize in foam-based and adjustable-air mattresses.

“You have the ubiquitous advertising of Tempur-Pedic and Select Comfort and others, and consumers believe that the foam mattress is the solution to what ails them,” said Barrie Brown, a consultant and former CEO of retailer Mattress Giant, recently acquired by bigger rival Mattress Firm Holding Corp.

Companies that make the more traditional beds containing coil springs have tried to jump on to the specialty train, but while Serta and Simmons – both owned by Ares Management LLC and Ontario Teachers’ Pension Plan – have released successful products, Sealy has fallen behind.

An external spokeswoman for Sealy, Gemma Hart, said that the company has a long-term goal of controlling 20 percent of the U.S. specialty market, and was “pleased” with the retailer and consumer feedback it received for its new gel-foam based Optimum line after distribution began late April.