Thursday, November 19, 2009
Short Signal for Dell Inc. (Public, NASDAQ:DELL) For Tomorrow November 20, 2009.
Our analysis told us to consider Dell Inc. (Public, NASDAQ:DELL) as a short sell trade candidate for Tomorrow November 20, 2009, asssuming that it does not gap down too low. Given the earnings release, Dell Inc. (Public, NASDAQ:DELL) would trade in the red with heavy volume.
Dell Inc. (Public, NASDAQ:DELL) Earnings Disappoint Street
Dell Inc. (Public, NASDAQ:DELL) earnings are summarized below. Announcement was made after hours, and should trade at higher volume tomorrow November 20, 2009.
(RTTNews) - PC maker Dell Inc. (DELL) said Thursday after the markets closed that its third quarter profit fell 54% from last year, as revenue dropped and margins shrank amid global market share loss and weak corporate demand. The company's quarterly earnings per share also came in below analysts' expectations as did its quarterly revenue.
The Round Rock, Texas-based company reported net income for the third quarter of $337 million or $0.17 per share, compared to $727 million or $0.37 per share for the year-ago quarter.
The company said the latest quarter results include pretax expenses of $123 million, or $0.05 per share, for organizational effectiveness actions and $40 million or $0.01 per share for amortization of intangibles.
On average, 26 analysts polled by Thomson Reuters expected the company to earn $0.28 per share for the third quarter. Analysts' estimates typically exclude special items.
Gross margin for the quarter fell to 17.3% from 18.8% a year ago, while operating margin declined to 4.5% from 6.7% last year.
Total operating expenses for the quarter fell 10% to $1.66 billion from $1.83 billion a year earlier.
Revenue for the third quarter fell 15% to $12.90 billion from $15.16 billion in the same quarter last year. Third quarter revenue grew 1% sequentially. Twenty-eight analysts had a consensus revenue estimate of $13.18 billion for the third quarter.
Dell said its combined sales in China, India, Brazil and Russia rose 18% sequentially and 5% year-over-year. In China, Dell's second largest country in terms of revenue, third quarter sales increased 20% sequentially and 8% year-over-year.
For the third quarter, large enterprise revenue fell 23% from last year to $3.4 billion, as reduced IT spending by large companies continued in all major regions of the world.
Public revenue for the quarter declined 7% year-over-year to $3.7 billion. Sales to small and medium business customers dropped 19% to $3 billion in the third quarter. Consumer revenue for the quarter fell 10% to $2.8 billion.
Desktop PC revenue for the third quarter fell 26% to $3.0 billion, while mobility revenue, which includes laptop PCs, declined 14% to $4.2 billion.
In the third quarter of 2009, Dell lost its position of the world's second biggest PC maker to Taiwan's Acer. Dell had lost the global PC lead to HP in 2006. According to market research firm Gartner, Inc. (IT), worldwide PC shipments increased in the third quarter by 0.5% year-over-year to 80.9 million units.
Hewlett-Packard (HPQ) continued to lead the worldwide PC market with market share of 19.9%, followed by Acer with 15.4% market share and Dell with 12.8% market share, Gartner said. However, Dell was the top PC vendor in the U.S., the world's largest PC market, in the third quarter, with a market share of 26.2%.
Last month, Dell announced that it would close its desktop PC manufacturing plant located at Winston-Salem, North Carolina early next year. The closure would result in a reduction of 905 jobs, with an immediate elimination of 600 employees in November. Th company expects to complete the plant shut-down process by January 2010.
Dell's software and peripherals revenue for the third quarter fell 7% from last year to $2.4 billion, while server and net working revenue for the quarter dipped 6% to $1.5 billion.
Dell is the world's third largest maker of server computers behind International Business Machines Corp. (IBM) and Hewlett-Packard Co. (HPQ).
Enhanced services revenue for the third quarter declined 9% year-over-year to $1.2 billion and storage revenue slid 19% to $508 million.
For the first nine months of its fiscal year, the company reported net income of $1.10 billion or $0.56 per share, compared to $2.13 billion or $1.06 per share for the same period last year.
Revenue for the nine-month period fell 20% to $38.00 billion from $47.67 billion in the prior year period.
Looking forward, the company said it expects fourth quarter revenue to improve over the third quarter. Dell expects seasonal demand improvement in its consumer business, while demand in public is typically lower during the quarter.
Michael Dell, chairman and chief executive officer, said, "We are seeing improvement in overall underlying IT demand that is continuing into the fourth quarter. The same is true with momentum in Dell's business, specifically in our Large Enterprise and SMB segments. The launch of Windows 7 is being very well received by SMBs and consumers, and we'll see the benefits of that more fully in our fiscal Q4."
Earlier this month, Dell completed its $3.9 billion acquisition of IT-service provider Perot Systems Corp., which enable it to expand its service offerings to better compete with rivals HP and IBM. Dell said Thursday that the integration of Perot Systems into the new Dell services business is under way, with consolidated reporting to begin in the fourth quarter.
Putting an end to years of speculation, Dell last week confirmed plans to enter the lucrative, but competitive smart phone business. The company announced partnerships with China Mobile Ltd. (CHL) in China and Claro in Brazil as the first two supporting mobile operators to sell Dell Mini 3 smart phones.
Dell said that the initial Mini 3 smart phones are designed around Google Inc.'s (GOOG) Android operating system. The company did not release technical specifications for the Mini 3, but said details of phone models will be announced on a partner-by-partner basis when devices are available in stores, anticipated in late November for China Mobile and year's end for Claro.
Dell's larger rival HP last week raised its 2010 guidance and reported preliminary fourth earnings that topped Wall Street's forecasts.
In terms of stock performance, Dell shares have gained 55.17% in the last 12 months, during which HP shares have gained 52.83%. Dell shares trade at 12.50 times its estimated forward earnings, compared to HP's 11.56%.
Dell shares, which have traded in a range of $7.84 to $17.26 over the past year, closed Thursday's regular trading session at $15.87, down 19 cents or 1.18%. The stock is currently losing 98 cents or 6.18% in after hours trading.
For comments and feedback: contact editorial@rttnews.com
(RTTNews) - PC maker Dell Inc. (DELL) said Thursday after the markets closed that its third quarter profit fell 54% from last year, as revenue dropped and margins shrank amid global market share loss and weak corporate demand. The company's quarterly earnings per share also came in below analysts' expectations as did its quarterly revenue.
The Round Rock, Texas-based company reported net income for the third quarter of $337 million or $0.17 per share, compared to $727 million or $0.37 per share for the year-ago quarter.
The company said the latest quarter results include pretax expenses of $123 million, or $0.05 per share, for organizational effectiveness actions and $40 million or $0.01 per share for amortization of intangibles.
On average, 26 analysts polled by Thomson Reuters expected the company to earn $0.28 per share for the third quarter. Analysts' estimates typically exclude special items.
Gross margin for the quarter fell to 17.3% from 18.8% a year ago, while operating margin declined to 4.5% from 6.7% last year.
Total operating expenses for the quarter fell 10% to $1.66 billion from $1.83 billion a year earlier.
Revenue for the third quarter fell 15% to $12.90 billion from $15.16 billion in the same quarter last year. Third quarter revenue grew 1% sequentially. Twenty-eight analysts had a consensus revenue estimate of $13.18 billion for the third quarter.
Dell said its combined sales in China, India, Brazil and Russia rose 18% sequentially and 5% year-over-year. In China, Dell's second largest country in terms of revenue, third quarter sales increased 20% sequentially and 8% year-over-year.
For the third quarter, large enterprise revenue fell 23% from last year to $3.4 billion, as reduced IT spending by large companies continued in all major regions of the world.
Public revenue for the quarter declined 7% year-over-year to $3.7 billion. Sales to small and medium business customers dropped 19% to $3 billion in the third quarter. Consumer revenue for the quarter fell 10% to $2.8 billion.
Desktop PC revenue for the third quarter fell 26% to $3.0 billion, while mobility revenue, which includes laptop PCs, declined 14% to $4.2 billion.
In the third quarter of 2009, Dell lost its position of the world's second biggest PC maker to Taiwan's Acer. Dell had lost the global PC lead to HP in 2006. According to market research firm Gartner, Inc. (IT), worldwide PC shipments increased in the third quarter by 0.5% year-over-year to 80.9 million units.
Hewlett-Packard (HPQ) continued to lead the worldwide PC market with market share of 19.9%, followed by Acer with 15.4% market share and Dell with 12.8% market share, Gartner said. However, Dell was the top PC vendor in the U.S., the world's largest PC market, in the third quarter, with a market share of 26.2%.
Last month, Dell announced that it would close its desktop PC manufacturing plant located at Winston-Salem, North Carolina early next year. The closure would result in a reduction of 905 jobs, with an immediate elimination of 600 employees in November. Th company expects to complete the plant shut-down process by January 2010.
Dell's software and peripherals revenue for the third quarter fell 7% from last year to $2.4 billion, while server and net working revenue for the quarter dipped 6% to $1.5 billion.
Dell is the world's third largest maker of server computers behind International Business Machines Corp. (IBM) and Hewlett-Packard Co. (HPQ).
Enhanced services revenue for the third quarter declined 9% year-over-year to $1.2 billion and storage revenue slid 19% to $508 million.
For the first nine months of its fiscal year, the company reported net income of $1.10 billion or $0.56 per share, compared to $2.13 billion or $1.06 per share for the same period last year.
Revenue for the nine-month period fell 20% to $38.00 billion from $47.67 billion in the prior year period.
Looking forward, the company said it expects fourth quarter revenue to improve over the third quarter. Dell expects seasonal demand improvement in its consumer business, while demand in public is typically lower during the quarter.
Michael Dell, chairman and chief executive officer, said, "We are seeing improvement in overall underlying IT demand that is continuing into the fourth quarter. The same is true with momentum in Dell's business, specifically in our Large Enterprise and SMB segments. The launch of Windows 7 is being very well received by SMBs and consumers, and we'll see the benefits of that more fully in our fiscal Q4."
Earlier this month, Dell completed its $3.9 billion acquisition of IT-service provider Perot Systems Corp., which enable it to expand its service offerings to better compete with rivals HP and IBM. Dell said Thursday that the integration of Perot Systems into the new Dell services business is under way, with consolidated reporting to begin in the fourth quarter.
Putting an end to years of speculation, Dell last week confirmed plans to enter the lucrative, but competitive smart phone business. The company announced partnerships with China Mobile Ltd. (CHL) in China and Claro in Brazil as the first two supporting mobile operators to sell Dell Mini 3 smart phones.
Dell said that the initial Mini 3 smart phones are designed around Google Inc.'s (GOOG) Android operating system. The company did not release technical specifications for the Mini 3, but said details of phone models will be announced on a partner-by-partner basis when devices are available in stores, anticipated in late November for China Mobile and year's end for Claro.
Dell's larger rival HP last week raised its 2010 guidance and reported preliminary fourth earnings that topped Wall Street's forecasts.
In terms of stock performance, Dell shares have gained 55.17% in the last 12 months, during which HP shares have gained 52.83%. Dell shares trade at 12.50 times its estimated forward earnings, compared to HP's 11.56%.
Dell shares, which have traded in a range of $7.84 to $17.26 over the past year, closed Thursday's regular trading session at $15.87, down 19 cents or 1.18%. The stock is currently losing 98 cents or 6.18% in after hours trading.
For comments and feedback: contact editorial@rttnews.com
Wednesday, November 18, 2009
Stock Market Trading Journals
I have started this blog to post trading journal entries related to actual or fictious trading I would be doing or thinking about. Traders agree that trading journals help in improving one's trading. Trades in the journals are meant to educate only one student in mind: that student is myself. Comments from readers are welcome, but please do not post insulting comments as I do not want to spend time removing them. Also, stay on topic in your comments.
I may be trading the instruments I would mention in the journals. The content of this blog cannot and should not be construed as advice of any kind to any reader. If you do not agree, please leave this blog immediately.
I believe that one should trade only with money one can lose, and in fact I believe that one should assume that the money will lost. Of course, I do not plan to lose money in actual trades, but that it is safe that I adopt that assumption from the beginning.
The first Journal I would like to start is related to trading stocks from the short side. I have decided to consider this avenue at this time, because my analysis indicates that the market is on the verge of starting a retreat from the current recent high levels. If there is a retreat, I currently estimate that it would extend for 3 to 4 months, and would end sometime in the Spring of 2010. In general the market does not go in a straight line, and there are rallies in a retreat, which can be vicious for traders holding short stock positions.
I may be trading the instruments I would mention in the journals. The content of this blog cannot and should not be construed as advice of any kind to any reader. If you do not agree, please leave this blog immediately.
I believe that one should trade only with money one can lose, and in fact I believe that one should assume that the money will lost. Of course, I do not plan to lose money in actual trades, but that it is safe that I adopt that assumption from the beginning.
The first Journal I would like to start is related to trading stocks from the short side. I have decided to consider this avenue at this time, because my analysis indicates that the market is on the verge of starting a retreat from the current recent high levels. If there is a retreat, I currently estimate that it would extend for 3 to 4 months, and would end sometime in the Spring of 2010. In general the market does not go in a straight line, and there are rallies in a retreat, which can be vicious for traders holding short stock positions.
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