Dell To Release Earnings Today, And Other Vendors Might Be Watching

In a 6:50 p.m. announcement last night, Dell announced that it would be issuing a press release at the close of business today providing its preliminary financial results for its fiscal third quarter. Dell delayed its earnings release from its originally scheduled Nov. 16 reporting date under the pressure of a series of investigations, including probes by the U.S. Securities and Exchange Commission and the Audit Committee of its own board.

So day traders and Dell watchers will be keeping a close eye on the wires at 4 p.m. today, waiting for the news. But others who may be paying close attention to Dell's fortunes are companies that list Dell as one of its biggest customers.

Here's a quick, but not all-inclusive, list of companies that point to Dell as a critical customer:

Western Digital. The hard disk drive maker said in its 10K filed earlier this week with the SEC:

During 2006, 2005 and 2004, sales to Dell accounted for 12%, 16% and 14% of the Company's revenue, respectively.

EMC. The enterprise storage vendor had this to say in its most recent quarterly report with the SEC:

For the three months ended September 30, 2006 and 2005, sales to Dell Inc. accounted for 15.1% and 11.1%, respectively, of our total revenues. For the nine months ended September 30, 2006 and 2005, sales to Dell Inc. accounted for 14.5% and 11.1% respectively, of our total revenues.

Lexmark. The printer company reported, when it filed its 10K in March:

During fiscal years ended December 31, 2005 and 2004, one customer, Dell, accounted for $782 million, or 15.0% and $570 million, or 10.7% of the company's total revenue, respectively.

Seagate. The hard disk drive company reported in its most recent 10K:

In fiscal years 2006 and 2005, Dell accounted for 11% and 12% of consolidated revenue, respectively.

Sonic Solutions. The software vendor reported in a recent filing that:

Revenue from Dell accounted for 20% and 23% of our total net revenue for the second quarters ended September 30, 2005 and 2006, respectively, and for 18% and 23% of our total net revenue for the six months ended September 30, 2005 and 2006, respectively.

Altiris. Altiris, which makes service-oriented software, wrote in an SEC filing:

An important part of our operating results depends on our relationship with Dell. The loss of significant revenue opportunities with Dell could negatively impact our results of operations. Dell accounted for approximately 25% of our revenue in 2004, 26% of our revenue in 2005, and 23% of our revenue in the six months ended June 30, 2006.

And that's not including other companies that list Dell as one of their biggest customers but don't break Dell out in a separate explanation in their financials -- companies like Intel, AMD and Microsoft.

One company, not in the technology sector, used to be in the same boat as these companies but isn't any more. Central Freight, which carried packages for Dell, reported in a recent filing with the SEC:

Our customer contract with Dell, which accounted for approximately 3.8% of our revenue in 2005, expired in June 2005. At that time, we determined that the rates being paid by Dell were inadequate to achieve satisfactory yield, as those rates (a) had been frozen in the period between June 2000 and May 2003, (b) had been reduced by approximately 8.0% in May 2003, and (c) had been reduced by an additional 12.7% in June 2004. Following expiration of the customer contract, we proposed an approximately 30.0% rate increase in our core business with Dell, and opted out of our non-core interline business with Dell, due to unprofitable revenue splits with interline carriers. Historically, the non-core interline business that was discontinued had accounted for approximately 65.0% of revenue from Dell. Our negotiations with Dell continued into November 2005, at which time Dell requested that we take no rate increase. We were unwilling to continue serving Dell on those terms, and we declined further business with Dell in December 2005. As a result of the foregoing, we do not expect that significant revenues will be derived from Dell in the future. The discontinuation of business with Dell had a negative impact on our revenues in the third quarter of 2006 compared to the third quarter of 2005.

As of the close of business Monday, shares of Central Freight stock were trading near its 52-week high.

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