“Dude, you got Dell stock? Well, poor you,” Jay Palmer writes for Barron’s. “Since mid-July, shares of Round Rock, Texas-based Dell Computer have tumbled 28%, from just under 42 to 29.76, the lowest level in roughly two-and-a-half years. Over the same period, long-scorned rival Hewlett-Packard has risen nearly 15% to 28.53 from 24.73. So what’s going on?”
“Well, last week’s news certainly has one wondering. Ahead of its third quarter results due out this Thursday, Dell issued a stark warning that its three-month revenues will be only 2% higher at $13.9 billion, well below its original guidance of $14.1 to $14.5 billion. Earnings (before a $450 million, or 14-cents-a-share one-time charge, mainly for replacing faulty parts) will be around 39 cents a share, up 18% from a year earlier but still at the very low end of recent projections,” Palmer writes.
“A single-quarter miss could be forgiven. But Dell’s revenue growth has now slowed for seven quarters in a row and, worse, this will be the fourth consecutive quarter that Dell has missed the market’s estimates. Not surprisingly, last week saw downgrades by analysts at several top firms, many of them questioning whether Dell can ever hit the ambitious 2008 sales target of $80 billion set last April, up from perhaps $56 billion this year,” Palmer writes. “‘Has Dell lost its mojo?’ asks Cindy Shaw at Moors & Cabot. ‘I think so, and that’s why I am downgrading the stock.’ At the stock’s current price, there are still more than a few die-hard fans. They argue that if there was ever a company capable of masterminding a return to growth, it’s Dell . That’s probably true, but it’s no longer enough. If Dell’s revenue fails to grow faster, and certainly if the company continues to miss earnings targets, it will be time to admit that Dell is past its best.”
Full article here.
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MacDailyNews Take: Why not just shut the company down and give the money back to shareholders, Mr. Dell?
In the last reported quarter, Apple boosted growth in total Mac shipments by 48%. Dell’s unit sales increased 17.6% in the same period according to Gartner Inc. Apple’s market cap is currently $50,387,216,880. Dell’s is currently $70,796,255,550.
“We’re coming after you, you’re in our sights.” – Apple CEO Steve Jobs speaking about Dell, November 10, 1997. (source)
Related MacDailyNews articles:
Apple growing faster with more innovative products, better support than ‘one-trick pony’ Dell – November 01, 2005
IDC: Apple shows rapid growth, holds 4.3% U.S. market share on 48% growth – October 17, 2005
Michael Dell say’s he’d be happy to sell Apple’s Mac OS X if Steve Jobs decides to license – June 16, 2005
Why buy a Dell when Apple ‘Macintel’ computers will run both Mac OS X and Windows? – June 08, 2005
Apple Macs are less expensive than Dell PCs – April 25, 2005
Dell CEO: Apple can’t just have one product and then say they’re the innovative leader of the world – February 22, 2005
BusinessWeek: Rather than dismissing Apple products as fads, Dell should try starting a few – January 31, 2005
Dismissive Dell CEO not impressed with Apple Mac mini, calls iPod a ‘one-product wonder’ and a ‘fad’ – January 17, 2005
Michael Dell owes Apple an apology; Apple up 176 percent vs. Dell’s 13 percent in past 12 months – January 15, 2005
The Dell Tolls
MDN: “We’re coming after you, you’re in our sights.” – Apple CEO Steve Jobs speaking about Dell, November 10, 1997.
1997, eight (8) years ago.
Lame, MDN, lame. Got any quotes from 1985???
MDN, if you’re going to bother giving a take, please be mature about it.
MW: Quit being a “two” year old.
Michael Dell should file for Chapter 11 and return whats left of his profits to the stock holders…
And then, throw a chair, and maybe then he could polish off that day-old box of doughnuts !
MW= “left” … As in ..when all is said and done ..
I’m sorry, evert g., was there a time limit? I wasn’t aware Jobs put an 8 year limit on his quest. In another 8 years, Apple’s position will surprise a helluva lot of people, evert g. included.
evert g.,
It’s about as Lame as Michael Dell saying that the best ting Apple could do was close up shop and return the money back to its investors!
Faced with a similar question on what he would do if he were acting chief executive Steve Jobs, Dell chief executive Michael Dell said, “I’d shut it down and give the money back to the shareholders.”
Cool Factor:
MDNs quote about shutting down the company was what Michael Dell said about Apple a few years back.
As soon as I saw the headline I predicted the MDN take…
Have you noticed that you see DELL much more than Apple on television now. Every television show has DELL computers all over the place.
coolfactor…I don’t understand your comment about MDN’s take. They were just mimicking Mr. Dell’s 1997 comment about how to fix Apple computer.
Re: For evert g. – Memorable quote from 1985
George McFly: “Last night, Darth Vader came down from planet Vulcan and told me that if I didn’t take Lorraine out that he’d melt my brain.”
I think Michael should expand into making meals for institutions. Commodity lunchmeat that’s “DELL-icious!”
Cheap and just good enough is not working for a lot of people anymore.
However, in Dell’s defence, they do have to sell computers with Windows installed.
Well I was just over at dellrumors.com and I see that DellTunes is almost ready to go live. Also, the new Dell Mini is primed and ready to go. There are several new DellPods poised to be released for this holiday season, and they’re predicting a DellPod with video! Michael Dell will be doing the keynote address at DellWorld in January so that means new stuff. So, it’s not all bad news.
Re: “Cheap and just good enough is not working for a lot of people anymore.”
Wow! I just realized that DELL and my ex-wife have a LOT in common!
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Thanks, Big Al!
“DELLworld”
An amusement park with six mile long lines, no fun, no ride at the end and a coupon for ten dollars off of a root canal.
“DELL Mini”
A floor length, no frills, black dress.
“DELLpod”
Invasions of the Body Snatchers (1956)
“DELLtunes”
Three scratched 78 LPs of obscure Polka songs on accordion.
AMPAR:
George McFly: “Last night, Darth Vader came down from planet Vulcan and told me that if I didn’t take Lorraine out that he’d melt my brain.”
BEST MDN QUOTE EVER.
“you made a time machine out of a delorean!?!?”
MDN “Why not just shut the company down and give the money back to shareholders, Mr. Dell?”
Could you explain how that would work great geniuses at MDN???
You guys have the business accumen of a 7th grader.
“Well I was just over at dellrumors.com and I see that DellTunes is almost ready to go live. Also, the new Dell Mini is primed and ready to go. There are several new DellPods poised to be released for this holiday season, and they’re predicting a DellPod with video! Michael Dell will be doing the keynote address at DellWorld in January so that means new stuff. So, it’s not all bad news.”
It’s Novemeber already. Dell will have to be pretty smartish about rolling out these new products to get a sizable hit for the xmas quarter. The DellTunes will have problems mainly because it won’t be able to work with 75 % of the MP3 players out there.
Problem is for Dell, is that they cut margins and product quality to gain market share which they succeeded at very well. Only to be dinged by their products not being cool enough or having windows related problems. Don’t get me wrong, they still sell a lot of machines, but they are missing their revenue and profit predictions because of those issues.
Whenever a company sacrifices quality for market share, it will always lose out in the end. Compaq tried to do the same. Did well for a while and then ran into trouble. Dell are now in the same boat.
Locked out of iTMS, locked into MS WMA, butt ugly design… dude I’m get’n a Dell!
weener Man,
Can you READ? If so, did you notice any of the previous posts attributing that statement to MICHAEL DELL originally?
Apparently, YOU and MR. DELL have the business acumen and research abilities of 7th graders.
(Man, do you ever look stupid right now!)
I hate to go against the tide here, but my criticism is for the Wall Street sharks that piss on 18% growth. I’m an investor too, so I know the way it works. None the less, as a business owner I find it over the top to see so much disdain heaped on a company that is achieved nearly $14 BILLION in quarterly revenue. That’s an astounding achievement. Remember while you read about the decline in Dell stock price, that they are being punished for painting a rosier picture than the rosy picture that is. Positive growth, positive revenue (far exceeding Apple’s) equals a healthy Dell. Frankly, why wouldn’t you want a healthy Dell. Some people want, even need, to buy a Wintel box. So, let them. I rather they buy it from a company that provides American jobs than from an overseas company.
I dont know why everyoje is hating on MDN lately. “The Take” is what they do. It’s why a lot of people read MDN. It’s edgy, and unapologetic. If you don’t like it, there are plenty of other bland Mac sites out there.
Lesson of life for Mr. Dell:
NEVER put on your smug face and give advice re: the future of your competitor you think is in trouble.
Michael Dell is about to get his clock cleaned with the dual boot Mac/Intel systems next year. He realizes this with two recent things. 1) Stating publicly that he would welcome an OS X license for Dell machines 2) Introducing the XPS line and trying to corner the top tier machines which Apple will dominate soon.
All one has to do is do is an online search of the customer service nightmares of Dell; and their questionable business practices on their Web site. They are losing business because of word of mouth.
As for the MDN take that PC fans apparently don’t understand, perhaps MDN should make it clearer that Michael Dell made that comment about Apple… since PC fans apparently can’t follow the blue link to read that he said that. (You never know, it MAY lead to spyware, adware or a nasty virus!)
For those of you who think you’re buying American when you buy Dell, I’ve got big news for you.
Most of the products Dell sells are manufactured and at least partially assembled in China. Most of the help desk and phone order workers are off shore. Even a lot their ‘design’ work is done elsewhere. Dell is exporting many more American jobs than it is creating.
Next we will see Michael Dell doing a Chirac! Yeee-ha!
Go Apple!!!! Hardly wait until Jan MacWorld!
Dells biggest headache is coming from Microsofts new Xbox, which is acutally a media player.