Dell To Report Earnings Decline Amid Tough Week On Wall Street

In the wake of Tuesday's sharp sell-off on the New York Stock Exchange and Nasdaq, Dell plans to report its fourth-quarter earnings on Thursday, and for the first time in memory it will show the PC giant in decline.

Dell also could produce as many questions as answers when it announces its quarterly sales and profit. As with its third-quarter report, the Round Rock, Texas-based company won't be conducting the traditional question-and-answer session with financial analysts and media. Dell remains under investigation by the Securities and Exchange Commission and the U.S. Attorney for the Southern District of New York, both of which are examining Dell's revenue recognition, accruals and balance sheet.

Though Dell doesn't provide formal guidance on quarterly sales and earnings to investors, the company announced on Jan. 31 -- the same day that CEO Kevin Rollins resigned and was replaced by founder and chairman Michael Dell -- that it expected its results to fall short of what was then the average Wall Street analyst estimate of $15.3 billion in revenue and earnings per share of 32 cents. For the year-ago quarter, Dell turned in sales of $15.2 billion and a profit of 43 cents per share.

Wall Street has since ratcheted down its expectations for Dell. According to Thomson Financial, the average of analyst forecasts calls for Dell to turn in revenue of $14.88 billion and earnings of 29 cents per share.

Dell hasn't provided in-depth detail on its financial performance since its quarter that ended last May. But even though research firms Gartner and IDC report that Dell's market share has continued to decline, some solution providers that resell Dell products say the company may have begun to show some strength in the channel with its aggressive pricing.

One East Coast solution provider told CRN that his company recently closed "a very large" deal with Dell hardware, noting that Dell provided very aggressive pricing in a competitive engagement. Other solution providers that compete with Dell, though, have told CRN they have been able to win new business from prior Dell customers over issues such as customer satisfaction.

At the same time Dell reports its earnings Thursday, it also faces a Nasdaq deadline. Faced with delisting for failure to file its last two quarterly financial reports with the SEC, Nasdaq has told Dell that by Thursday it must provide the results of a probe into the company's financials by the Dell board's audit committee.

Some companies, including Apple, have made the results of similar audit committee investigations public at the time they turned them in to Nasdaq. Dell, though, hasn't indicated if its initial findings will be revealed publicly this week.