Dell Dragged Down by Americas & Consumer; Sets Bad Tone For HP
Dell Inc. (NASDAQ: DELL) is out with disappointing earnings and the report is going to sour the tone for Hewlett-Packard Co. (NYSE: HPQ) on Wednesday. Earnings for the PC maker and services firm came out as $0.43 EPS and that…
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The guidance looks pretty bad too. Dell is targeting growth of only being up 2% to 4% sequentially and that implies revenues of $14.7 billion to $15 billion rather than the $15.42 billion expected. Ouch!
Dell said that Enterprise Solutions and Services revenue grew about 2% year over year to $4.5 billion. The company further noted that enterprise solutions and services businesses now account for 50 percent of its gross margin.
Large Enterprise revenue was $4.4 billion in the quarter, a drop of 3%; Public revenue was $3.5 billion, a drop of 4%; Small and Medium Business revenue grew 4 percent to $3.5 billion; Consumer revenue was $3 billion, a drop of 12%.
Here is a breakdown by region: Asia-Pacific and Japan revenue was flat but China increased 9%. EMEA revenue was down 1% and Americas was down 7%. Revenue in the BRIC countries increased 4 percent.
Dell ended the quarter with $17.2 billion in cash and investments against a market capitalization rate of $26.5 billion. Shares closed up 0.7% at $15.08, but the stock is now down almost 8% at $13.75 in the after-hours session.
JON C. OGG
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
