Beleaguered Dell’s earnings drop 33%

“Dell reported a 33 percent drop in fourth-quarter profits that were slightly ahead of expectations. But the No. 2 PC maker’s sales figures came in below estimates and Dell warned that growth and profit margins will remain ‘under pressure’ for the next few quarters,” CNNMoney reports.

CNNMoney reports, “Dell said its sales for the quarter were $14.4 billion, a 5.1 percent decrease from the year-ago period. Analysts had expected revenues of $14.88 billion. Dell reported earnings of $673 million, or 30 cents per share for the quarter, compared to analyst expectations of 29 cents per share. In the fourth quarter of 2005, the company earned $1 billion, or 43 cents per share. Analysts had expected profits of 32 cents per share for the quarter before Dell issued a warning on January 31.”

“Dell’s stock has tumbled over 40 percent over the past two years on decreased sales, slimmer profit margins and the accounting probe… Dell did not offer specific guidance, but said that it expects growth and margins to be under pressure for the next several quarters as it transforms the company,” CNNMoney reports.

“‘We are disappointed with the company’s results, but what matters is our future plan of action. We are systematically moving to increase efficiencies, improve execution and transform the company,’ said Michael Dell in a statement. ‘Our business model will become more aligned with the needs of our customers,”‘ he added,” CNNMoney reports.

Full article here.

“Among Dell’s main business areas, desktop PCs remained the company’s biggest revenue generator, accounting for $4.6 billion, or 32% of the quarter’s sales. However, desktop revenue fell 18% from last year’s $5.6 billion,” Rex Crum reports for MarketWatch.

Crum reports, “Mobility sales, which include notebook PCs, was flat with a year ago at $3.8 billion. ‘Those results were pretty weak,’ according to Shaw Wu, an analyst with American Technology Research. ‘That area is one of the most important in the PC market right now.'”

“Additionally, Dell announced that it had received a stay from the Nasdaq Listing and Hearing Review Council, regarding any further action to delist the company’s stock from the Nasdaq. Dell has until May 4 to provide the council with any additional material for it to consider,” Crum reports. “Shares of Dell fell almost 2% in after-hours trading to $22.62.”

Full article here.

MacDailyNews Take: Box assembler Michael Dell’s best future plan of action to transform his floundering, unexceptional, run-of-the-mill company would be to… drum roll, please… shut it down and give the money back to the shareholders.

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BusinessWeek: Welcome back, Michael Dell – don’t get too comfortable – February 01, 2007
Rollins out as beleaguered Dell’s CEO, replaced by Michael Dell immediately – January 31, 2007
Fortune: Michael Dell reiterates he’d love to sell Apple’s Mac OS X if only Jobs would license – January 22, 2007
Total eclipse of Michael Dell goes off as predicted – January 10, 2007
SEC starts formal probe of beleaguered Dell – November 16, 2006
Apple does it again: New Macbook Pros much cheaper than Dell – October 25, 2006
Dell feels the heat from Apple – October 04, 2006
The Motley Fool: ‘Intel to Dell: you guys stink’ – September 28, 2006
Beleaguered Dell’s OS-limited PC sales ‘declining rapidly below expectations’ – analyst – September 21, 2006
Fortune compares Mac vs. Dell: ‘you’ll get more for your money with Apple’ – September 11, 2006
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AP: Time to think different, Apple Mac beats Dell on price, software compatibility, and more – August 23, 2006
Dell profit falls almost in half; announces informal SEC probe – August 18, 2006
Dell cannot compete with Apple’s new Mac Pro price or feature set – August 15, 2006
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Dell warns 1Q earnings will miss mark; shares tumble – May 08, 2006
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InformationWeek: Apple Mac run Mac OS X, Windows, and Linux; Dell and HP should be concerned – May 01, 2006
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  1. I’m sure Apple likes this, but I bet HP is rejoicing. The playing field needs to be more level, and it seems it is becoming that way. Apple has killed them on the high end hardware pricing, where Dell makes its money. A transformation is difficult for Dell when you depend on M$ and your greatest innovation is attaching your logo to 3rd party conglomerations of hardware. They are just really getting boring to the public, where Apple is getting more interesting. Their commercials are just bathroom breaks, but Apple’s commercials just make you wanna see what the PC and Mac guy are gonna do next. Even the Dell Dope Dude was at least a little interesting. The best thing Dell could do on their low end hardware is come out with some colors to increase the teenie-bopper sales. Apple’s complete hardware/software solution is really catching on. The sheep are getting smarter and just plain tired of the hassles. Apples biggest problem is now the problem of growing too fast.
    I’d like to see them innovate even more and sit at 12-15 percent market share. That would be a perfect position. I still think a 60″ widescreen iMac/HDTV with PIP, BlueRay, AppleTV, iPod charger, and video iChat would not just move into the living room, but own the living room. Yes, 60″ Sounds crazy, huh? All you would need is a sofa and a place to put your wireless keyboard and mouse.

  2. Meet the needs of customers,.. be more efficient…


    they have a number of assets (cash)…lets take efficient to its logical conclsion, and the needs of the customers to their logical conclusion…

    in other words, speed up the ultimate restructuring plan…

    (i defer to the MDN take for the remainder of this comment)

    the sole good point about dell that i would acknowledge is that they know they’re completely screwed, from a software perspective, and are begging Jobs for an OS X license.

    which, of course, Jobs will never give – Jobs has a long memory, and Dell has even less taste than The Microsoft Felon.

  3. I wish my own company could be “unexceptional” and still earn $674 Million in the 4th Quarter! ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

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