Dell raises intrigue by rescheduling 1Q report (Update)

May 14, 2013

Struggling personal computer maker Dell will report its latest quarterly earnings ahead of schedule in a move likely to spur speculation that the results will be dismal.

The schedule change announced Tuesday means Dell Inc. will release its fiscal first-quarter earnings after the market close this Thursday. The Round Rock, Texas, company had planned to report the results on May 21.

Dell spokesman David Frink declined to say why the company made the switch.

There's high intrigue surrounding Dell's earnings report because the company is trying to sell itself to CEO Michael Dell and other investors for $24.4 billion.

Two of Dell's biggest shareholders, billionaire Carl Icahn and Southeastern Asset Management, have made an alternate proposal in an attempt to block that deal.

Dell's board of directors so far has maintained the proposed sale to Michael Dell and his allies at $13.65 per share represents the safest deal for the company's shareholders because of a steady deterioration in PC sales as more people and businesses buy smartphones and tablets instead of laptop and desktop machines.

The board's reasoning will be bolstered if Dell's first-quarter results paint a bleak picture. The chances of a rosy outlook appear remote. The research firm International Data Corp. estimates Dell's PC sales fell 11 percent during the first three months of this year. That downturn followed an 8 percent drop in Dell's total revenue during its last fiscal year.

Analysts surveyed by FactSet are predicting Dell will post adjusted first-quarter earnings of 35 cents per share on revenue of $13.5 billion. If those figures pan out, it would represent a 19 percent decrease in Dell's adjusted earnings from last year and a 6 percent dip in revenue.

Michael Dell, who founded the company 29 years ago while he was in college, says he can turn things around by focusing on more profitable areas of technology, such as business software and data storage. The changes could depress Dell's results for several years, a factor in Michael Dell's hopes to take the company private after 25 years on the stock market. He says Dell will be able to overhaul its business away from the glare and distractions of the stock market.

Icahn and Southeastern disagree, arguing that existing shareholders should be given an opportunity to reap the gains for a turnaround. Their proposal would give shareholders the option of retaining a stake in Dell as a publicly held company. Icahn and Southeastern believe so strongly in their plan that they are mounting an effort to oust the 12-member board that's backing the company's sale to Michael Dell and replace it with directors who would support their alternate proposal.

Dell's stock shed 9 cents to $13.43 in afternoon trading Tuesday.

Explore further: After 15 years, Nasdaq recoups losses of dot-com crash

Related Stories

Dell board committee seeks info on investor plan

May 13, 2013

Dell board members say they need more details from investor Carl Icahn if he wants them to seriously consider his latest challenge to Michael Dell's $24.4 billion plan to take the computer maker private.

Rebel Dell shareholder demands more information

Mar 06, 2013

Dell's largest independent shareholder is turning up the pressure against the proposed $24.4 billion sale of the struggling personal computer maker to a group of investors that includes its CEO.

Investors challenge Dell takeover plan (Update)

May 10, 2013

Dell's largest independent shareholder has teamed with activist investor Carl Icahn in another challenge to founder Michael Dell's $24.4 billion bid to take the struggling computer maker private.

Dell, Icahn agree on a share ownership cap (Update)

Apr 16, 2013

Dell Inc. and Carl Icahn have agreed to cap his stake in the personal computer maker while a special board committee considers competing takeover bids from the billionaire investor, a group led by CEO Michael ...

Dell rejects request for info leading to buyout

Mar 12, 2013

(AP)—Dell has rejected a request from a shareholder rights group seeking to review the internal information that led to the proposed $24.4 billion sale of the struggling personal computer maker.

Recommended for you

How smart are the mobile shoppers who use smartphones?

16 hours ago

In the age of the smart phone, how smart are the mobile shoppers who use these almost ubiquitous devices? A study from South Korea published in the International Journal of Mobile Communications hopes to answer that questi ...

India's Infosys gives muted earnings, stock falls

17 hours ago

Indian software giant Infosys Technologies saw its shares dip nearly seven percent Friday after it reported a single digit rise in yearly revenues and also missed quarterly profit estimates.

Apple wins patent appeal in China

20 hours ago

Apple has won an appeal in China over patent rights to voice recognition software such as the iPhone's "Siri", with a court overruling an earlier decision that had gone against the US technology giant.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.