 |
Dell complaints
The #1 Dell complaint forum
|
| View previous topic :: View next topic |
| Author |
Message |
hotrodlincoln
Moderator
Joined: 08 Apr 2003
Posts: 1719
Location: Not in Austin anymore
|
 Posted: Thu Nov 20, 2008 9:18 pm Post subject: Disturbing Data From Dell |
 |
|
| Quote: |
Melinda Peer, 11.20.08, 08:25 PM EST
The personal computer maker expects tech spending to remain weak after Q3 sales missed estimates; profit beat consensus after cost cuts.
Dell set the bar low for its third quarter as it warned that the global economic slowdown had squeezed technology spending. The computer maker's cost-cutting efforts helped its earnings beat estimates but sales were weaker than forecast and Dell expects demand to remain "challenging."
Gartner analyst Charles Smulders deemed Dell's report "very disturbing," since the company is continuing efforts to reinvent itself. According to the company, now more than a third of sales come from servers, storage, services and software as its tries to lessen its reliance on personal computer sales.
Shares of Dell (nasdaq: DELL - news - people ), the world's second-largest personal computer maker, closed Thursday's session down by 54 cents, or 5.2%, at $9.81, ahead of the report. But in after-hours trading, it gained back all but a penny of that. Still, the shares fetched more than $28 late last year.
Dell's third quarter got off to a rocky start as the company warned that declining technology investments--that contributed to the second-quarter's larger-than-expected drop in earnings--were already weakening, barely a month into the period, as the global economic slowdown continued to force companies to scale back spending. (See "Waning Demand Hinders Dell.") Meanwhile, Dell enacted some spending cuts of its own: selling factories and eliminating 8,900 jobs in order to reach its goal of saving $3.0 billion in annual expenses in the next three years. (See "Dell Trades Factories For Money.")
Late Thursday, the company said net earnings slipped 5.1%, to $727.0 million, or 37 cents a share, from $766.0 million, or 34 cents a share, a year ago. Analysts polled by Thomson Reuters anticipated earnings of 31 cents a share. Sales fell 3.1%, to $15.2 billion, from $15.6 billion, coming in well below the $16.2 billion in sales projected by analysts.
"From a financial perspective, the bright spot was clearly managing its business to drive growth in earnings per share. However, revenue was down and its cash conversion cycle was negative," said Gartner's Smulders, adding, "A positive cash conversion cycle has been one of the underpinning of its business model." Smulders also said the company remains more vulnerable to U.S. weakness since it's less geographically diverse than competitors.
The Round Rock, Texas-based company said it expects to incur costs as it continues to realign its business and warned that the technology spending environment would remain challenging. The dour guidance contrasted with Hewlett-Packard's projection that future earnings would be better than previously expected, which analysts attributed to its broad consumer base. (See "HP Stands Out.")
|
http://www.forbes.com/2008/11/20/dell-earnings-technology-markets-equity-cx_mp_1120markets34.html?partner=yahootix |
|
| Back to top |
|
 |
Sponsor
|
|
|
hotrodlincoln
Moderator
Joined: 08 Apr 2003
Posts: 1719
Location: Not in Austin anymore
|
| Posted: Thu Nov 20, 2008 9:19 pm Post subject: Dell reports reversal of fortunes |
|
|
| Quote: |
By Richard Waters in San Francisco
Thursday Nov 20 2008 20:10
Dell (NASDAQ:DELL) suffered an unexpectedly sharp reverse in revenues in its latest quarter as the economic downturn hit corporate demand for technology, the US PC maker revealed on Thursday.
However, the company managed to adjust its operations in the face of the disruption to show an improvement in its profit margins, largely thanks to an acceleration of earlier cost-cutting plans.
Dell said its markets were too uncertain for it to make predictions about future performance, but added that it expected IT demand to "continue to be challenging".
Signs that Dell's long-running turnround efforts had so far helped it to withstand the worst effects of the downturn led to a 6 per cent jump in its shares in after-hours trading, although at $10.38 they still stood more than 60 per cent below their 12-month high.
The world's second biggest PC maker after Hewlett-Packard, Dell said its revenues had fallen by 3 per cent to $15.2bn in the latest quarter. Most analysts had been expecting the company to report growth of 7 per cent in the quarter.
Revenues from PCs, which account for 59 per cent of the company's business, dropped 6 per cent from a year before, as higher sales of laptops failed to make up for a 14 per cent fall in desktop PC revenues.
However, growing sales of higher-margin products and services for enterprise customers offset some of the decline.
Michael Dell, chief executive officer, said that Dell's reliance for much of itsrevenue on direct sales to customers - rather than through retailers or others partners - had given the company an advantage in fast-changing market conditions.
It has also yielded the early information needed to refocus on the most profitable markets and cut costs faster. "We did not pursue some growth that was dilutive to the company," Mr Dell said.
Dell's operating costs dropped by 11 per cent, to $1.8bn, as it accelerated a cost-cutting plan first announced early this year.
The company's workforce has now fallen by 10,800 from its peak, and now stands at 80,800, said Brian Gladden, chief financial officer.
Profitability was also helped by the shift to higher-margin products, as well as falling component prices, lifting the company's operating profit margin to 6.7 per cent from 5.3 per cent a year before.
Due to lower investment income and a higher tax rate, net income fell by 5 per cent to $727m from a year before. After buying back shares, however, Dell said earnings per share had climbed to 37 cents, up from 34 cents a year before and the 31 cents Wall Street had expected.
The company also said that, after a strategic review of its financial services arm, it had decided not to try to sell that business.
|
http://us.ft.com/ftgateway/superpage.ft?news_id=fto112020082021093440&referrer_id=yahoofinance |
|
| Back to top |
|
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Usergroups
Register
Profile
Log in to check your private messages
Log in
