--Analysts anticipate earnings of 49 cents a share, revenue of
$15.75 billion
--Positive trends in enterprise, small- and medium-sized
business market
--Conservative guidance expected for the rest of the year
By Benjamin Pimentel
Dell Inc. (DELL) is expected to post a significant
earnings-per-share gain when it reports results Tuesday as the
company gets a lift from a still-generally-strong corporate
market.
Dell is scheduled to report fiscal second-quarter financials
after the closing bell. Analysts expect Dell to post earnings of 49
cents a share, on revenue of $15.75 billion, according to a
consensus survey by FactSet Research.
For the year-earlier period, the company reported earnings of 32
cents a share, on revenue of $15.53 billion.
"All signs point to another meaningful margin-driven EPS upside
for Dell's July quarter," Citigroup analyst Richard Gardner said in
a note. "Component pricing has been more favorable than expected
and dollar/euro exchange rate should also provide a modest tailwind
for European margins."
Sterne Agee analyst Shaw Wu cited upbeat trends in enterprise,
which make up 30% of Dell's total revenue, and in the small- and
medium-sized business market, which is 25% of total sales, which
are bound to offset weaknesses in the company's consumer
business.
"In addition, Dell is benefiting from low expectations with
consensus modeling only 1.5% year-over-year top-line growth,
materially below its guidance of 5%-9% for fiscal year 2012," Wu
wrote.
Analysts have been more upbeat about Dell's ongoing bid to
establish a stronger presence in the market for technology product
and services sold to businesses.
In fact, while the company's shares have taken a hit like other
major tech issues, Dell's stock is still up more than 15% since the
beginning of the year.
However, in the wake of the dramatic market downturn, and the
anticipated sharp decline in public sector spending, many analysts
expect Dell to offer a muted forecast.
"Considering the slowdown in the economy in July, we aren't
looking for material outperformance in the quarter," Wells Fargo's
Jason Maynard wrote. "As sentiment on IT spending has deteriorated
over the last month, we expect the company to be conservative with
guidance for the remainder of the year."
-Benjamin Pimentel; 415-439-6400; AskNewswires@dowjones.com