When Dell, Inc. (NASDAQ: DELL) releases quarterly results Thursday how will it do? Dell has managed to quickly enter the consumer retailer market, which has helped it stave off the more valiant Hewlett-Packard Corp. (NYSE: HPQ) from running away with just about ever retailer PC sale these days. But investors are bound to say, "that was yesterday -- what have you done for me today?"Analysts are expecting the company to report earnings of 33 cents per share on revenue of $15.66 billion, according to Thomson Reuters. Although Dell announced a $1 billion share buyback plan just a few months ago, it needs to all it can to not let its stock price implode. The growth may be over (permanently), and the brand may not be the premier name it once was. Add that to the fact that the competition (most notably H-P) enjoys every cost savings Dell once did, and the picture become way less rosy.
Does Dell have any angles left? From a fundamental PC selling standpoint, it's hard to make that argument. In terms of Micheal Dell's famous comment that Apple, Inc. (NASDAQ: AAPL) should be sold off in pieces and money returned to shareholders. My, my how the tables have turned. Still, Dell is not going anywhere fast and its stock price could be languishing in the dust for quite some time.
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Reader Comments (Page 1 of 1)
5-28-2008 @ 1:33PM
Chris said...
Brian,
I would pay more attention to your analysis if your spelling and grammar were up to basic standards. Because it is not, I am led to wonder if your opinion is worth the real estate it takes up on my monitor. You may have a point, but unfortunately the distractions caused by your writing make you appear uneducated, in a hurry and a bit like an armchair quarterback.
If you check your history, HPQ was in the same position a relatively short time ago. Because they have hired a very savvy CEO in Mark Hurd, HPQ is making a significant comeback. The media and Wall Street will show them "love" for a while until they become the long-term leader. Once they have been in the driver's seat long enough, there will be no end to the angst against them by a seemingly endless stream of media, customers, judges, analysts, and oh yes, bloggers.
In my opinion Dell must find its heart again. Dell does well as an underdog. The real question is whether the executives at Dell will make the right moves and hand leadership over to someone like Mark Hurd. Any company can create a flash-in-the-pan product that creates hype for a short period. Only truly inventive comanies have the stomach to reinvent themselves. Therein lies the true long-term value of Dell's stock.