Dell’s Q4: A Positive Shift to High-Margin Biz or a Work-in-Progress?
Dell is prepping for an earnings call for its fourth fiscal quarter and annual performance. A poll that surveyed analysts concluded that the average forecast stands at 51 cents a share on revenue of $15.94 billion, and $2.12 a share on revenue of $62.03 billion for the full year. There is no consensus, however, when it comes to the company’s current direction: its shift to enterprise, software and services.
One perspective is rather optimistic.
“Analysts seemed to be heartened that Dell has been a consistent performer in recent quarters. According to Gartner, Dell is gaining share in PCs and x86 servers, but storage is challenging. Dell has pivoted away from a partnership with EMC to selling its own storage gear.”
On the flip side of the coin, about three quarters of Dell’s revenue is generated from the PC industry. This market is being seriously disrupted by the uproar of mobile devices and tablets, the iPad in particular. It’s a trend that’s impacted almost every manufacturer, including rival Hewlett-Packard. The latter’s had a similar change of focus, though Dell has some catching up to do with its big data product lineup.
Shaw Wu of Sterne Agee believes that Dell is also facing some serious competition from the likes of EMC and IBM in the enterprise. Wu changes his rating on the company from neutral to underperform not long ago.
HP is also holding its earnings call this week. New CEO Meg Whiteman is under pressure to prove that she can outdo her previous two predecessors, and the hardware giant’s earnings in this most recent quarter will reflect the company’s overall performance ever since she took over.
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