Dell (DELL) is not up this morning. Most investors thought it would be. The company reported preliminary results for its second quarter of fiscal year 2008, with revenue of $14.8 billion, operating income of $896 million and earnings per share of $0.32 . Those were better than last year’s numbers which are still subject to some accounting changes.

The first culprit for a poor reaction to Dell’s new is that the company said "near-term results could be adversely impacted by a slower decline in component costs in the second half of the year."

But, the other, perhaps more important reason is that Dell is not doing very well in the portable/laptop business. And, the industry is moving away from the desktop.

Percentage of Total Net Revenue:
————————————————-
Desktop PCs                                                    34%
Mobility                                                            26%
Servers and Networking                                     11%
Storage                                                              4%
Enhanced Services                                              9%
Software and Peripherals                                    16%

Laptops are driving the industry now.

Over at HP, desktop revenue rose modestly last quarter from $3.9 billion from $3.569 billion. Notebook revenue moved from $2.815 billion to from $4.084.

Dell did not show that kind of progress.

Douglas A. McIntyre

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