Dell Delivers on Earnings, Partly (DELL)

Dell Inc. (NASDAQ: DELL) has reported earnings and the reception is getting a “sell the news” even though there are some positive and less negative undercurrents here.  Dell turned in earnings of $0.49 EPS net and $0.54 EPS adjusted on revenues of $15.37 billion. We had Thomson Reuters estimates of $0.47 EPS but with revenues of $15.65 billion.

The PC and IT giant said that gross margin was 22.6% and adjusted gross margin came in at 23.1%.  What is important here is that the company’s guidance is that it is on track to exceed operating income growth of 17% to 23%  and the company ended the quarter with $16 billion in cash.  Cash flow from operations was $851 million.

Unfortunately, Dell is also saying that the current trend is at the lower end of the 1% to 5% growth for the year due to the uncertain macroeconomic environment.  It is also having issues on the supply side of disk drives due to flooding in Thailand.

The two areas of the business that were lower were government and personal, but it had 8% growth in enterprise solutions and services business.

Dell shares rose 2% today to $15.63 against a 52-week range of $12.99 to $17.60.  The initial reaction sent shares lower by more than 2% but the verdict remains out until the conference call.

JON C. OGG