NEW YORK (CNN/Money) - Normally dull Dell gave Wall Street an unusual double-whammy surprise Thursday - it missed revenue expectations and delivered lower than expected guidance.

And the normally predictable company's shares took a beating after the bell, falling about $3 in after-hours trading on the electronic Inet brokerage. Dell's shares closed at $39.52. Dell was expected to report revenue of $13.7 billion, according to Thomson First Call, but revenue for the quarter was $13.4 billion. Its earnings were in line with analyst estimates of $0.38 cents per share, minus a three-cent tax benefit.

Dell CEO Kevin Rollins gave two reasons for the company's missed revenue expectations and disappointing guidance – Uncle Sam's appetite for computers was lower than expected, and the company pushed pricing for low-end products too aggressively, trying to keep up with competitors.

Analyst gave mixed opinions about Dell's ability to overcome the demand for cheaper PCs.

"The revenue miss was split evenly between weak demand in the public sector, primarily in U.S. federal buying, and Dell being aggressive with prices in the consumer sector," said Cindy Shaw, an analyst at Moors & Cabot Capital Markets. "The latter is easily fixed. (But) Dell doesn't appear to have confidence federal demand will improve in the current quarter."

Rollins acknowledged that Dell had "misexecuted" the way it prices its products and vowed to focus on that issue. "In terms of overall pricing, we will go back to our normal execution... paying more attention to upselling. That's an execution issue for us to make sure we get the customer into the right product. Many customers see the hot price and call us but that's not what they really want," he said in a conference call to reporters.

Some analysts said upselling is typically part of Dell's strategy, and agreed that the company simply didn't execute that as well as usual in the second quarter.

But Shaw Wu, an analyst at American Technology Research, said he's not sure upselling is the answer to weaker revenue growth from consumers.

"It's more of an industry problem; I don't think it's specific to Dell," Wu said of the aggressive price reduction among PC makers."(Average selling prices) have trended down almost every year. That's just part of technology. You get more bang for your buck if you wait. It impacts dell, but we think it's more of an industry issue. People don't want to pay as much. I don't know how much they can do to dry that... it's going to continue to get tougher and tougher."

But Wu added that the company met earnings expectations, a surprise given the company's concerns about pricing pressure.

"Normally you would think profit margins would go down, but they went up," he said. "They were still able to deliver pretty good profitability."

The Round Rock, Texas-based computer reported record shipments of 9.1 million computer systems, including 2.7 million laptops, and company-record revenue of more than $2 billion from software and peripheral products, including printers and displays. Notebook sales grew 47% year-over-year.

Adam Adelman, equity analyst at Philippe Investment Management, agreed that the fact that revenues fell despite record numbers of units shipped is likely an industry-wide issue, he feels Dell is still well-positioned.

"It's not a question of marketshare; it's more a revenue issue," said Adelman. "The pie might just get smaller for PC manufacturers. It's clear that Dell is still gaining marketshare, especially internationally."

Dell's third quarter guidance also disappointed investors, falling below what the Street was expecting. Analysts predicted sales guidance of $14.6 billion and earnings per share of $0.41. Dell said it expects third quarter revenue of $14.1 to $14.5 billion, and earnings per share of 39 to 41 cents. Dell's guidance took company watchers by surprise, particularly because the third and fourth quarters of the year are typically Dell's best, on the back of strong back-to-school and holiday sales.

"The guidance reflects a couple of things -- they are not anticipating a pickup in the public sector, and a mix shift to low priced products in the consumer sector. Declining component prices are always an advantage for Dell, so with component prices (declining more slowly than usual), that is also working a little bit against Dell."

--------------

Moor & Cabot's Shaw does not own shares in Dell, and the firm does not do investment banking business with the company. American Technology research does not own shares in Dell and has no banking ties to the company. Philippe Investment Management owns shares of Dell.