Mediocre 4Q for Dell - Analyst Blog
20 2월 2013 - 7:00PM
Zacks
Dell Inc. (DELL) delivered fourth-quarter 2013
earnings of 40 cents per share, ahead of the Zacks Consensus
Estimate by a penny.
Revenues
The company reported revenues of $14.3 billion in the reported
quarter, down 10.7% year over year. The decline in revenues was due
to lower contributions from all the business segments and
geographical regions.
Revenue by Segments
Large Enterprise posted revenue of $4.7
billion, down 7.0% year over year. Within the large enterprise,
server and networking revenue moved up 25.0% and Enterprise Server
& Storage business moved up 10%.
Public Revenue was $3.5 billion, down 9.0% year
over year. The company continues to witness a slump in the U.S.
Federal business. Moreover, a challenging spending environment in
the U.S. federal business coupled with some uncertainty in the
budgetary and IT spends affects this system.
Small and Medium Business revenue was down 5.0%
to $3.4 billion. The SMB segment was mainly affected by the
reduction in the order renewal rate.
Consumer Business revenue plummeted 24.0% to
$2.8 billion.
Operating Results
Gross margin in the reported quarter was 21.7% up from 21.1% in
the year-ago quarter.
Operating income for the quarter was $698.0 million or 4.9% of
revenues in the reported quarter, down 25.0% year over year, hurt
by lower rate of reduction in expenses than revenue.
GAAP earnings in the quarter were 30 cents per share compared
with 43 cents a share in the year-ago quarter. Excluding special
items like amortization of intangibles, severance and facility
consolidation cost, acquisition-related costs, as well as income
tax adjustments, earnings per share in the quarter came in at 40
cents versus 51 cents in the year-ago quarter.
Balance Sheet & Cash Flow
The company exited the quarter with cash and cash equivalents of
$12.6 billion, up from $11.0 billion reported in the previous
quarter. The company generated cash flow from operations of $1.4
billion, down from $1.8 billion reported in the previous
quarter.
Guidance
As the company is looking forward to a pending merger agreement /
LBO, so the management has not provided an outlook for fiscal year
2014.
Dell to Go Private
Dell recently announced its decision to go
private in a leveraged buyout agreement (LBO). Founder Michael Dell
will acquire the company at a purchase consideration of roughly
$24.4 billion, much higher than the market expectation of $23.0
billion. Dell’s shareholders will be rewarded with $13.65 per share
in cash. The transaction is likely to be completed by the second
quarter of fiscal 2014.
The idea behind the privatization is to stay away from public
scrutiny and expectations and better focus on business growth and
profitability. However, Dell’s dependence on the PC market remains
the main problem.
In addition, Dell lacks a firm footing in the servers, storage
and cloud computing space, which is unfavorable in comparison to
IBM Corp. (IBM), and to some extent,
Hewlett-Packard Co. (HPQ). Another competitor,
Apple Inc. (AAPL) is dominating the tablet
space.
Our View
Dell reported modest fourth-quarter results with earnings per
share exceeding the Zacks Consensus Estimate, but revenues and
operating income taking a massive hit. Revenues across the entire
business segment declined annually.
The major issue faced by the company is the cannibalization of
the PC/notebook business. Moreover, the company is facing tough
challenges due to cutthroat competition, low business growth in
Europe and restricted spending environment. Some analysts also
expect further declines in PC shipments.
Moreover, the competition faced by the company in the SMB and
server segments as well as a downturn in the European economy is
also a concern.
The stock carries a Zacks Rank #4 (Sell).
APPLE INC (AAPL): Free Stock Analysis Report
DELL INC (DELL): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis Report
INTL BUS MACH (IBM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Dell (NASDAQ:DELL)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
Dell (NASDAQ:DELL)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024