Dell (DELL) announced the delay of its 10-K (Annual Report) for the year-ended FEB 2, 2007 beyond the April 3, 2007 date because the ongoing investigation has not been completed. DELL shares were halted after the close and resumed at 4:30 PM EST.
The Audit Committee’s investigation has identified a number of accounting errors, evidence of misconduct, and deficiencies in the financial control environment. The Audit Committee is working with management and the company’s independent auditors to determine whether the accounting errors necessitate any restatements of prior period financial statements, and to assess whether the control deficiencies constitute a material weakness in Dell’s internal control over financial reporting.
Some of this may have been thought of as "somewhat expected," but this isn’t a positive for those who have been banking on an imminent turnaround plan. As management is busy trying to get its filings in, it has to be taking away from working toward the restructuring in whatever form is coming. DELL closed up $0.04 today at $23.39, and its 52-week trading range is $18.95 to $30.60 (2-year high is $41.99). DELL shares are going to be likely be all over the place in after-hours, but shares are currently down about 5.5% at $22.10 after resuming.
Jon C. Ogg
March 29, 2007
Jon Ogg can be reached at [email protected]; he does not own securities of the companies he covers.
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