Dell shares drop as SEC probe is unveiled and earnings drop by half

Shares of the world's largest computer manufacturer, Dell, started dropping like a yacht anchor this morning after its latest quarterly earnings dropped by 50% compared to the year-ago quarter. Dell also disclosed its cooperation with an informal SEC investigation that had been in progress for the last year. Dell shares plunged by 7% in pre-market trading this morning, and with the market just now opening up, I'll be stuck to the monitor to see if any more damage is headed Dell's way insofar as a share plunge beyond the 7% from this morning.

In brighter news, Dell finally let up on the stranglehold it has on Intel processors and announced late yesterday that it would being using CPUs from Advanced Micro Devices based on performance and customer request. Customers have been requesting that Dell use AMD chips for years now, as AMD's Athlon and Opteron platforms were outpacing Intel's offerings all over the map, and were very competitively priced to boot. Just a few months ago, Dell announced that it would integrate AMD chips into some of its server offerings, but yesterday's announcement is quite a bit more broad, as AMD chips will be used in Dell's desktop computers -- quite a larger market than its server products.

Dell CEO Kevin Rollins announced that Dell had earned $502 million in the latest quarter, compared to $1.02 billion from the year-ago quarter. Profits fell on pricing pressures and not enough cost cutting (apparently). The resurgence of Hewlett-Packard under operational wunderkind Mark Hurd is putting the most pressure on Dell most likely, as HP released better-than-expected results this week. Seems like Rollins has a formidable competitor in Hurd, and these two company leaders should be duking it out for years to come.

Brian White has worked in various executive positions in technology and telecommunications and now focuses on editing and writing.