Internet Financial News
Newsletter SampleFREE IFN Newsletter



Dell Reveals Earning Drop, SEC Review

By: David Utter
2006-08-18

Dell experienced a 51 percent plunge in its second quarter earnings, and also disclosed the Securities and Exchange Commission has requested information from the company.




Dell Reveals Earning Drop, SEC ReviewIf any Dell (DELL) executives stop by a Round Rock theater to see "Snakes On A Plane" today, they are liable to be the only ones in the audience who envy the kind of day Samuel L. Jackson is having.

Yesterday's announcement of second quarter '07 financials by the computer maker contained the news of a substantial dropoff in profits. Net income fell to $502 million, for 22 cents per share. The previous period last year delivered $1.02 billion, 41 cents per share, to the company.

CEO Kevin Rollins blamed a "margin squeeze" on component prices, which did not drop as the company had anticipated. Rollins said on a conference call that Dell had been "overly aggressive" with its pricing despite market conditions.

CFO James Schneider also revealed that Dell has been the focus of some attention from the SEC over its accounting practices. He also noted that the SEC initiated the review in August 2005.

Dell executives had not mentioned the matter earlier, with Schneider citing that the company had no obligation to disclose the investigation, despite the SEC's request for a number of documents that "would fill up a truck," as Schneider described the request.

Although Dell declined to comment on the investigation, it appears to be growing in scope. Schneider said the number of people being drawn into the SEC's inquiries had increased.

"We felt we can't do this and keep this really quiet," Schneider said. He also claimed that the SEC would not find anything that would have a material impact on the company's financials.

Investors responded in after-hours trading by knocking shares of Dell down 5 percent, to 21.64 according to ECN.

---
Tag:

Add to Del.icio.us | Digg | Yahoo! My Web | Furl

Bookmark IFN -


Titan Quest Forum Nintendo Wii Graphics Forum
Halo 3 Forum Mac Software  

Latest News