Dell Earnings: Falling Short Deflates Shareholder Hopes

S&P 500 (NYSE:SPY) component Dell Inc. (NASDAQ:DELL) reported its results for the first quarter. Dell is a technology company that offers desktop PCs, software and peripherals, servers, and networking and storage services to customers worldwide.

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Dell Earnings Cheat Sheet for the First Quarter

Results: Net income for Dell Inc. fell to $635 million (36 cents per share) vs. $945 million (49 cents per share) a year earlier. This is a decline of 32.8% from the year-earlier quarter.

Revenue: Fell 4% to $14.42 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Dell Inc. reported adjusted net income of 43 cents per share. By that measure, the company fell short of mean estimate of 46 cents per share. It fell short of the average revenue estimate of $14.92 billion.

Quoting Management: “We’re committed to continuing our strategy to re-shape Dell’s business as an end-to-end IT provider,” said Michael Dell, chairman and CEO. “We saw continued progress in our first quarter with the innovative IT solutions we’re providing – notably our latest Dell servers, storage, networking and services that deliver customers enhanced productivity.” “We continued to shift the mix of our business during a challenging environment,” said Brian Gladden, Dell chief financial officer. “Our enterprise solutions and services businesses now account for 50 percent of our gross margin, and we’ll continue to make the necessary investments to maintain our progress.”

Key Stats:

The company has now seen net income fall in each of the last two quarters. In the fourth quarter of the last fiscal year, net income fell 17.6% from the year-earlier quarter.

The company fell short of estimates last quarter after being in line with expectations the quarter before with net income of 51 cents.

Revenue fell last quarter after seeing a rise the quarter before. Revenue rose 2.2% to $16.03 billion in the fourth quarter of the last fiscal year from the year earlier.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the second quarter has moved up from 50 cents a share to 51 cents over the last ninety days. Over the past three months, the average estimate for the fiscal year has climbed from $2.05 per to share to $2.11.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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