Dell Q4 Earnings To Include $280M In Onetime Expenses

Ahead of its fourth-quarter earnings report, Dell said it would include onetime expenses totaling about $280 million. The total of the expenses incurred by Dell are split into two parts: stock-based compensation expenses and recently disclosed cost-reduction costs.

By taking these expenses into account, Dell will recognize and account for these costs now rather than spread them out over the course of the next fiscal year.

Dell expects to be charged about $135 million as part of streamlining its global manufacturing and distribution network as well as reducing the size of its work force. The $135 million in costs comes as part of the company's migration of production of computer systems for customers in Europe, the Middle East and Africa. Part of those expenses includes contracting new manufacturing partners by the start of fiscal year 2011.

In March 2008, Dell revealed a plan to reduce its operational expenses by $3 billion.

The remaining $145 million involves a pretax, noncash expense related to stock-option compensation. Dell said about $106 million of that cost comes as the company accelerates the vesting of previously awarded options.

The acceleration of stock options covers 20.9 million shares with a weighted-average price of $22.03. Dell said the action on these options will be effective starting Jan. 23, meaning the Round Rock, Texas-based computer manufacturer will take on that expense this quarter instead of spreading it out over time.

The remaining money, nearly $40 million, is an expense incurred for the annual true-up of full-year, stock-based compensation forfeitures.

Dell will report its fourth-quarter and full fiscal year earnings 2009 financial results on Feb. 26. The computer manufacturer also said it will continue to take cost-cutting steps in the coming fiscal year.

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