One-fourth of Dell investors reportedly withheld support for Dell CEO Michael Dell in a recent vote. Still, analysts are feeling positive and predicting modest growth for Dell's quarterly earnings call set for Aug. 19.
Computer-maker Dell will announce its fiscal year 2011
second-quarter results Aug. 19. While analysts are feeling positive
about the company, offering predictions of modest growth, Dell
investors are expressing quite the opposite.
In a regulatory filing released Aug. 17, Dell disclosed that 378
million of 1.5 billion votes opposed the continued presence of Michael
Dell on the company's board, The New York Times reported that same day.
Such negative sentiments likely stem from the recent conclusion of a
years-long investigation by the SEC (Securities and Exchange
In July, the company paid $100 million to settle charges
of fraud presented by the SEC. Dell CEO Michael Dell, while not
admitting to wrongdoing, additionally paid a $4 million penalty.
The charge followed from an investigation that began in 2005 and
regarded accounting practices related to Dell's relationship with
chip-maker Intel. In time, the SEC accused Dell of not being upfront
about the degree to which Dell's financial performance relied on
rebates and payments it received from Intel.
has additionally come under scrutiny from the Federal Trade Commission
and the New York State Attorney General's Office for allegedly
that have worked to more closely align
Intel with customers such as Dell while sharply elbowing out
competitors such as Advanced Micro Devices. In 2009, Intel settled with
AMD, following similar findings by the European Commission, and agreed
to pay its rival $1.25 billion.
Dell spokesperson David Frink told The Times, following the recent
shareholder vote: "Our board of directors has previously reaffirmed its
confidence in Mr. Dell's leadership and a majority of shareholders
Raymond James Equity research analyst Brian G. Alexander, in an Aug.
16 research note, predicted second quarter 2011 revenue for Dell of
approximately $15.2 billion, with EPS (earnings per share) falling in
line with consensus of $0.30.
"Our belief in an above consensus revenue forecast is supported by
2Q10 preliminary PC shipment data from IDC, in which Dell's total unit
shipments grew 19 percent [year-over-year], which was somewhat
favorably to our unit growth projection of 18 percent year-over-year
and was modestly above consensus thinking," wrote Alexander. "While
there have been growing data points about weakening PC unit growth in
July, we see this as mostly a consumer PC issue. Consumer PC sales
account for [approximately] 15 percent of Dell's total revenue. We also
see potential upside to our server revenue growth forecast of
[approximately] 20 percent [year-over-year], as our checks indicate
that unit trends were strong through July in the enterprise arena."
During the first quarter of its fiscal year 2011
, Dell saw revenue of $14.9 billion, with net income of $584 million.
Dell has since launched the Streak in United States, a tablet-smartphone hybrid, and a second Android-running Dell device, the Thunder,
is rumored to be arriving soon. In a June meeting with reporters,
Michael Dell noted the opportunities that increased smartphone adoption
He told reporters, "There has to be servers and storage to support
all the data that is being pulled by users, and this is an exciting
opportunity for us."