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Shares in Dell fell more than 8 per cent in early trading in New York on Friday after the US computer maker revealed on Thursday revenues that fell short of expectations in the latest quarter and admitted to rare errors in its handling of the fiercely competitive PC business.

However, Dell hit its earnings targets for the period and reiterated its confidence in both its underlying business approach and its long-term targets.

Kevin Rollins, chief executive, blamed the revenue shortfall in part on mistakes in the way that Dell had priced its PCs in the US. The company had been more aggressive in its pricing than necessary, Mr Rollins said, and could have made up for much of the shortfall if it had added $10-$15 to the price of each of the 9.1m machines it sold during the quarter.

“Frankly, we executed poorly on managing those average selling prices,” Mr Rollins said.

His admission marks a rare slip at a company that has risen to the top of the computer industry on the strength of a relentless, low-cost business model that has relied on close attention to operational detail.

Of the company's mistake, Mr Rollins added: “That one we feel we can fix fairly crisply. We think we can do it, we've been doing it now for 10 years.”

Alongside the pricing mistakes, Dell said it had also seen slower than expected growth in federal government spending on technology, as well as fierce price competition in the consumer PC market within the US.

Those forces prompted the company to issue a more modest forecast for the current quarter than analysts had been expecting, with growth estimated to reach $14.1bn-$14.5bn, below the estimates of some $14.6bn. The unusual revenue shortfall from a company renowned for its consistency led to a 7 per cent fall in its shares in unofficial after-market trading in New York.

Dell's revenues rose to $13.4bn in the three months to the end of July, an increase of 15 per cent from a year before. The company had forecast revenues of $13.6bn-$13.8bn, while Wall Street had been expected $13.7bn.

While Dell's revenues grew by less than anticipated in the latest quarter, it continued to outpace the rest of the industry and met its earnings targets. The company put its global market share at 19 per cent, a percentage point higher than a year before.

Its net income climbed by 28 per cent to $1.02bn, or 41 cents a share. On the pro forma basis by which Wall Street judges the company, earnings rose 23 per cent to 38 cents a share.

Dell's latest figures were again underpinned by its push into international markets and its move into new areas of the tech business including servers, peripherals such as screens, and services. International revenues climbed by 24 per cent and now account for 39 per cent of the overall business.

The comapny’s shares were down 8.26 per cent in early trading at $36.31.

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