Dell Inc slashed its 2012 revenue forecast as the outlook for technology spending this year weakened, sending its shares more than 7 percent lower.
The personal computer maker on Tuesday lowered its estimate for full-year revenue growth to just 1 to 5 percent, from 5 to 9 percent previously, adding that sales this quarter would likely stay flat.
The world's No. 2 PC maker, which in May said it anticipated strong government spending and a good back-to-school season, recorded sales of just under $15.7 billion in its fiscal second quarter ended July.
That marginally missed the $15.76 billion average forecast of Wall Street analysts polled by Thomson Reuters I/B/E/S.
The company founded by Michael Dell has consistently beaten Wall Street expectations this year, a result of expanding its footprint in higher-margin businesses such as servers, storage and computer services.
But industry executives warn that corporate and government spending may have begun to wane on fears of a second-half economic growth slowdown, while a high jobless rate pressures consumer income.
Dell slid 7.3 percent to $14.65 after hours, from a close of $15.80 on Nasdaq. Shares of rival PC maker Hewlett-Packard Co fell 1.3 percent to $32.18 after ending at $32.61 on the New York Stock Exchange.
From a market standpoint, clearly there's a different demand dynamic as you think about revenue growth, Dell Chief Financial Officer Brian Gladden said in an interview. It's a bit of an uncertain environment.
Dell posted net income of about $890 million, or 48 cents a share, in the quarter ended July, versus $545 million, or 28 cents a share, a year earlier. Excluding certain items, it earned 54 cents a share.
Analysts had expected 49 cents, according to Thomson Reuters I/B/E/S, but it was not immediately clear if that estimate was comparable.
Wall Street however focused on the outlook reduction, despite growing expectations that corporations like Dell may be forced to reduce their full-year targets as demand slows.
During its annual analysts' day in June, executives pledged to maintain its pace of acquisitions -- it completed its $960 million purchase of Compellent in February -- to gain access to corporate clients, and to safeguard margins.
(Reporting by Poornima Gupta; Editing by Richard Chang)