Skip to main content

Dell whiffs - why it was no surprise

Dell reported earnings after the close today. Net income dropped 17% to $616 million in the quarter on a revenue increase of 11% to $16.4 billion.

Excluding restructuring and other charges, Dell would have earned 33 cents a share. Including the charges, per share earnings are on track to be the lowest the company has recorded since late 2006 or early 2007. And this is after the company spent over a billion dollars to buy back shares.

Yesterday, I wrote a post on the Durable Goods Report (read it here). I made the point that new orders for Computers and related products were down 10.7% in July. That was more than twice the 4.7% drop that occurred in June. Shipments for Computers were down 12.9% in July after being down almost 5% in June.

Well, we recently received earnings from Hewlett-Packard (HPQ). In the PC segment, where they compete directly with Dell, H-P turned in pretty good numbers on a 15% increase in sales.

Given the fact that H-P and Dell are the two largest U.S. PC manufacturers, if one is doing well while orders and shipments are falling, it stands to reason that the other will not be doing so well. That other one had to be Dell.

Disclosure: none
Labels:

Comments

Anonymous said…
This blog is really nice and informative. We are pleased to know this blog is really helping people. Its our pleasure to post comment on this useful blog created by webmaster.
Indian Stock Market
November 3, 2008 at 6:55:00 AM EST

Post a Comment

Popular posts from this blog

Time to be conservative with your 401K

Most of the posts I and other financial bloggers write are typically focused on individual stocks or ETFs and managing active portfolios. For those folks who are more conservative investors, those whose main investment vehicle is a 401K, for example, the techniques for portfolio management might be a little different. The news of stock markets falling and pundits predicting recession is disconcerting to professional investors as well as to those of us who are watching our balances in an IRA or 401K sag. What approach should the average 401K investor take? Let's assume that the investor is contributing on a regular basis to one of these retirement accounts. There are two questions that the investor needs to ask: 1. Should I stop putting the regular contribution into stocks? My feeling is that investors making regular contributions are being handed a present by the markets. Every week the market goes down, these investors are lowering their average cost. When markets reco...
7 comments
Read more

The Trouble with Trend Reversal Indicators

Many of us use various trend reversal indicators to time our trades. Our desire is to determine when prices have changed direction so that we can ride the new trend. Why doesn't it always work out? The first reason, of course, is that unforeseen events often drive prices in unexpected directions. That is something we can't change and it often makes all of us technical traders crazy. On the other hand, sometimes an unforeseen event is a prelude to a new trend. A stock spikes up on a what seems to be a one-time piece of good fortune and soon falls back. Does it start making its way back up or does it resume a previous down trend? The conflict within trend reversal indicators is that, though they can definitely tell when prices change direction, they suffer from two problems. One, they often can't determine how significant that move in prices actually will be. Two, they are often lagging indicators. As such, they can be late in providing a signal, sometimes leading the investo...
1 comment
Read more

Brazil - in a bubble or on a roll?

A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation ...
4 comments
Read more