As PC Slump Continues, Dell Posts Lower Earnings

The proposed buyout, announced just two weeks ago, diminished the importance of the numbers released Tuesday.

The fourth-quarter report became even less significant when the company said its chief executive, Michael S. Dell, would not participate in a previously scheduled conference call to discuss the financial results with analysts.

Mr. Dell, who founded the company 29 years ago, is leading the buyout, which is facing opposition from two of Dell’s biggest shareholders.

The company, which is based in Round Rock, Tex., declined to field questions about the deal or the shareholder efforts to gain a bid above the currently agreed upon price of $13.65 a share.

Southeastern Asset Management and T. Rowe Price, the company’s two largest shareholders after Mr. Dell, have said they will vote against the deal unless the offer is sweetened. The company’s board so far has argued that the deal negotiated with Mr. Dell and a group of investors led by Silver Lake is a fair one.

If the deal closes, it will end Dell’s 25-year history as a publicly traded company.

Mr. Dell and his backers are betting that the company will be better able to diversify beyond the PC business without having to cater to the stock market’s demands for higher profits from one quarter to the next.

Dell’s slump stems from weakening demand for PCs as more technology spending shifts toward smartphones and tablet computers.

The most recent quarter showed Dell was still losing ground, although the drop-off was not quite as bad as analysts anticipated.

Dell earned $530 million, or 30 cents a share, for its fiscal fourth quarter, which ended Feb. 1. That was a 31 percent decline from $764 million, or 43 cents a share, in the quarter a year earlier.

Excluding acquisition- and severance-related charges, earnings were 40 cents a share. That was a penny above the average forecast of analysts polled by FactSet.

Revenue totaled $14.3 billion, down 11 percent from a year ago. It beat analysts’ expectations at $14.1 billion.

Shares of Dell gained 0.4 percent in extended trading after the financial results were released. They ended regular trading at $13.81.

Article source: http://www.nytimes.com/2013/02/20/business/as-pc-slump-continues-dell-posts-lower-earnings.html?partner=rss&emc=rss