Dell: Nothing To Write Home About
Dell (DELL) closed up today. Its shares were up over 2% to $28.36. The company then reported preliminary results for its second quarter of fiscal year 2008, with revenue of $14.8 billion, operating income of $896 million and earnings per share of $0.32.
Several factors effected operating expenses in the quarter, including $102 million, or $0.03 per share, in incremental compensation expense related to payments for expired in-the-money stock options; $59 million, or $0.02 per share, in costs associated with the Audit Committee’s investigation into certain accounting and financial reporting matters; and higher headcount and associated costs related to investments in sales and customer support.
The company highlighted areas outside PCs. Server revenue in the second quarter was $1.6 billion. For Q2, Dell was again No. 1 in the United States in server units shipped with 32.7 percent share. But, this is still a small part of the overall product and service revenue mix.
Percentage of Total Net Revenue:
Desktop PCs 34%
Servers and Networking 11%
Enhanced Services 9%
Software and Peripherals 16%
And its forecast was vague but carried a warning. “Near-term results could be adversely impacted by a slower decline in component costs in the second half of the year.”
Dell’s stock was fairly flat after hours.
Douglas A. McIntyre