“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
What I wanna know is when can we start using the word “beleaguered” when referring to Dell? Since we’re at “struggling” today, how far is that from my favorite word?
M/w : “blow” as in…
as usual MDN’s take blows.
I doubt MDN’s editors are doing anything but laughing at all these anti-“MDN take” flames. After all, all these people are reading the site, aren’t they? Every reader that feels the need to respond, instead of just rolling his eyes and going away, further proves just how successful MDN has become…