The Big Event Next Week: Dell's Earnings (DELL, HPQ)

Next Thursday we actually have a big report as Dell Inc. (NASDAQ:DELL) will post earnings after the close (Aug. 30).  This may be an actual report rather than a preliminary report, but it would be worth having at least some caution in expecting too much of a full report.  The good news is that the company recently said it had completed its own internal investigation and reviews, and it would be filing all of its past financial statements with the SEC.

Analysts, according to First Call, have the July quarter-end numbers pegged at $0.30 EPS and $14.63 Billion in revenues.  The coming quarter is expected to have $0.33 EPS and $15.1 Billion revenues. 

But here is the kicker: its chief rival, Hewlett-Packard (NYSE:HPQ), just beat earnings expectations and gave the all-clear signal ahead for guidance.  This morning we got a strong durable goods order that somehow showed a somewhat weaker PC-demand, but that should have been seen in any of the companies recent guidance so it may already be included and already factored in.  It is still a wildcard.  Dell has seen some problems causing delays in recent days, and now we have to see what news comes out over the next five days to see if the report or expectations ahead get changed.

Dell gave last preliminary numbers on May 31 and shares had closed at $26.91 on that day.  So at $27.50 mid-day Friday shares are up roughly 2% since then.  Shares have recovered off recent lows with the market but are basically in the middle of a trading range of $26 to $29 since last earnings; but we wont do any formal charting analysis until earnings are imminent. Options are also too far out to use right now.  Analysts still have targets pegged north of $32.00.

Next week is going to be a dead week with most of Wall Street either out the full week or at least the second half of the week ahead of Labor Day, and this is one of the few reports that may act as a catalyst either way on the earnings front. Stay tuned…..

Jon C. Ogg
August 24, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.