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Dell Third Quarter Earnings Preview
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DELL
Dell (Nasdaq:DELL) will release its third quarter results on Thursday, November 15, 2012. Analysts are expecting earnings per share of 40 cents after the company booked a profit of only 54 cents a share a year earlier.
Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: Earnings: Quality Means Everything
What to Expect: Analysts are expecting Dell to announce earnings of 40 cents per share, 25.9% less than a year ago, when the company reported earnings of 54 cents per share.
The consensus estimate is down from 49 cents three months ago, but it hasn't changed in the last month. Analysts are expecting earnings of $1.74 per share for the fiscal year.
Revenue for the quarter is expected to be $13.91 billion, short of last year's reported figure of $15.37 billion by 9.5%. Revenue for the fiscal year is expected to come in at $57.43 billion.
Company Performance: Over the last four quarters, revenue has dropped by an average 2.4% year-over-year. The sharpest fall was a drop of 7.5% from the year-earlier quarter in the most recent quarter.
P/E ratio for DELL is 5.6. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: How To Find P/E And PEG Ratios
The stock price has fallen 22.8% to $9.41 from $12.19 since August 14, 2012. The price is within 30 cents of its 52-week low ($9.11), which was set on November 2, 2012. Dell's stock has been doing poorly lately. Between August 31, 2012 and October 2, 2012 the price fell 69 cents to close at $9.90.
The Competition: Dell is a technology company that offers desktop PCs, software and peripherals, servers, and networking and storage services to customers worldwide. Fourteen of 26 analysts rate Dell a hold. They are slightly more optimistic about the stock recently, as the number of buy ratings has risen slightly over the past three months.
The company's closest competitor in the computer hardware industry is Apple (AAPL). Analysts are more optimistic about Dell than about Apple. Only 38 out of 39 analysts rate the latter a buy compared to 11 of 26 for the former.
Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: Earnings: Quality Means Everything
What to Expect: Analysts are expecting Dell to announce earnings of 40 cents per share, 25.9% less than a year ago, when the company reported earnings of 54 cents per share.
The consensus estimate is down from 49 cents three months ago, but it hasn't changed in the last month. Analysts are expecting earnings of $1.74 per share for the fiscal year.
Revenue for the quarter is expected to be $13.91 billion, short of last year's reported figure of $15.37 billion by 9.5%. Revenue for the fiscal year is expected to come in at $57.43 billion.
Company Performance: Over the last four quarters, revenue has dropped by an average 2.4% year-over-year. The sharpest fall was a drop of 7.5% from the year-earlier quarter in the most recent quarter.
The stock price has fallen 22.8% to $9.41 from $12.19 since August 14, 2012. The price is within 30 cents of its 52-week low ($9.11), which was set on November 2, 2012. Dell's stock has been doing poorly lately. Between August 31, 2012 and October 2, 2012 the price fell 69 cents to close at $9.90.
The Competition: Dell is a technology company that offers desktop PCs, software and peripherals, servers, and networking and storage services to customers worldwide. Fourteen of 26 analysts rate Dell a hold. They are slightly more optimistic about the stock recently, as the number of buy ratings has risen slightly over the past three months.
The company's closest competitor in the computer hardware industry is Apple (AAPL). Analysts are more optimistic about Dell than about Apple. Only 38 out of 39 analysts rate the latter a buy compared to 11 of 26 for the former.
by
Investopedia Staff
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