Tough earnings squash Dell's mojo
Posted
Aug 28 2008, 04:21 PM
by
Kim Peterson
Rating:
Poof! There goes all the buzz about Dell being a turnaround worth watching. The market has been excited about Dell, for the first time in a long while, but today's disappointing earnings announcement may have killed that enthusiasm.
After jumping 16% in the last three months, the stock price is being hammered in after-hours trading. And all the talk about Dell's recovery, about its cool new mini-laptops, and about CEO Michael Dell's revamped strategy has just moved to the back burner.
Dell's quarterly profit fell by 17% to 31 cents a share. Analysts were expecting 36 cents a share from the company. Dell is trying to cast itself as a work in progress, saying that it's "positioning" itself for future wins. CFO Brian Gladden said that margins were hurt by strategic moves to speed up growth. And restructuring charges hurt profit by a penny.
Revenue was solidly better than expected at $16.4 billion.
Dell shares are down nearly 11% in the after-market to $22.51.