That said, Michael Dell’s recent decision not to pay out the expected level of employee bonuses for fiscal 2007 gave a six-cent boost to earnings per share that helped the company beat the Wall Street profit estimate by a penny. It came in at $0.30.
Dell had said at the end of January that it would miss both revenue and earnings targets, so it was evidently the bonus decision helped the firm beat earnings targets. Regardless, the $801m of net income Dell reported was still down a full 33% on the year-ago period.
For the fourth fiscal quarter, which for Dell ended February 2, the company reported revenue of $14.4bn, down 4% on the year-ago quarter.
PC units were the main problem. Hewlett-Packard Co overtook Dell in the third quarter in terms of unit shipments, and this was reflected in Dell’s fourth-quarter.
Desktops revenue was down a billion dollars from the year-ago period at $4.6bn, an 18% decline based on an 18% decline in unit shipments.
Revenue from mobility products, which included laptops, was down 2% to $3.8bn, but unit shipments were up, presumably reflecting pricing pressure in the laptop market.
The firm emphasized that the results were preliminary. Dell is still poring over its books to investigate possible earlier misstatements. The Securities and Exchange Commission and a New York US Attorney are conducting similar investigations.
Because of these delays, the company hasn’t filed its regulatory reports for the last few quarters, and risks being delisted from the Nasdaq exchange as a result. Dell said yesterday that Nasdaq has extended the deadline for Dell to file its accounts to May 4.
The firm also didn’t host the customary conference call for analysts yesterday for the second quarter in a row, due to the SEC investigation, although declining to talk to the Street appears to be a Dell decision rather than a legal restriction.
The poor results already have their fall guy. Chief executive Kevin Rollins stepped aside in the closing days of the quarter, handing the throne back to Michael Dell, who had retired to the chairman’s role three years earlier.
Michael Dell has vowed to get the company back on track, and has been pruning management and launching some customer initiatives since taking over.
We are disappointed with the company’s results, but what matters is our future plan of action, he said yesterday. Our business model will become more aligned with the needs of our customers, which will improve their experience and yield improved growth and profitability for the long-term.
