The world's second largest personal-computer maker Dell Inc. (NASDAQ: DELL) is scheduled to report its 2009 third-quarter results after market close on Thursday, 20th November. Analysts on an average are looking for earnings of 33 cents a share on revenue of $16.4 billion in the third quarter of 2008 against 34 cents a share on revenue of $15.65 in the same period in 2007.

The stock recently hit a 52 week low of $8.85 on bleak outlook for global PC sales. 

On Monday, Merrill Lynch analyst Jeff Fidacaro lowered his rating on Dell's stock to "neutral" from "buy". Fidacaro wrote in a research note “while Dell’s shares have been under pressure and valuation looks attractive…we are downgrading Dell…given our view of a sharp downturn in the PC market (especially in desktops), and a lack of catalysts to either reignite growth or gain share in the next few quarters.”  For fiscal year 2010, he lowered EPS estimate to $1.20, from $1.64; for FY 2011 he now sees $1.32, down from $1.90. His revised revenue estimates are for $57.9 billion in FY 2010, and $57.6 billion in FY 2011, down from his previous expectations of $68.3 billion and $72 billion.

Fidacaro said his downgrade was based, in part, on the weak outlook for PC sales around the world next year. Fidacaro said the combination of "deteriorating global business conditions, tighter IT budgets, weakening consumer spending and recent production cuts," from some the major Taiwanese computer manufacturers. He expects a weakening demand environment in the U.S. and Europe to spread to Asia and the emerging markets as well.

According to Fidacaro the market for PCs has deteriorated so much that he took down his 2009 unit-growth forecast to a loss of 2% from a gain of 12% over 2008, and that if it weren't for expected strong sales of so-called netbooks, or mini-PCs, he estimates that worldwide units would drop 5% next year. For 2010, the analyst sees a 5% growth, compared with previous estimate of a 10.5% growth.

Citigroup analyst Richard Gardner also cut his 2009 PC growth outlook to a loss of 3% from a gain of 5%. In a research note he said, "it's clear that the PC industry is feeling the full impact of global economic recession." "It is easy for corporate and consumer users to postpone upgrades for one to two years or trade down to a less expensive system," he added. Gardner also lowered his 2009 earnings estimate on Dell to $1.37 a share from $1.49 a share. He said the company is in "the wrong place at the wrong time," as it derives about 70% of its total sales from corporate, government and educational customers in the United States and Western Europe.

Earlier, on November 13th, BMO Capital Markets analyst Keith Bachman downgraded his rating on Dell's stock to "market perform" from outperform". Bachman said many on Wall Street are expecting Dell's earnings to be "a prelude to more poor results in 2009."

On Tuesday, Raymond James slashed its price target on the shares of Dell to by $6 to $15 slump in demand for PCs, peripherals, and industry standard servers.

Berstien Research said it expects Dell to improve margins year-on-year, but weaker revenue growth and a difficult industry pricing environment may impact the company's business.

In mid-September the company had said in a statement that it "is seeing further softening in global end-user demand in the current quarter." In response to falling demand, Round Rock, Texas based company has been restructuring and cutting costs. In August, the company slashed 8,500 jobs out of planned 8,900.

A few days back, Dell announced that its chief technology officer (CTO) Kevin Kettler is leaving the company in mid January. Earlier this month, vice president of marketing Casey Jones, also stepped down from his position. However, the company made it clear that changes among executives have nothing to do with cost-cutting efforts of the PC supplier.

On Tuesday, rival Hewlett-Packard Co. (NYSE: HPQ) came up with better than expected preliminary fourth quarter results. The world's largest PC maker said that it expects to earn 84 cents a share in fourth quarter, 3 cents more than what it earned in the same period a year ago. Excluding one-time charges and items, it hopes to earn $1.03 a share, exceeding average analyst estimates of $1. The company expects the revenue to climb 19% to $33.6 billion.

Disclosure: Author does not own any of the stocks discussed here.