Dell Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Dell (Nasdaq: DELL  ) dropped 11% in intraday trading today after reporting revenue fell short of expectations in its most recent quarter and lowering its revenue forecast for the fiscal year.

So what: Non-GAAP EPS of $0.54 rose 69% year over year and beat the $0.49 consensus estimate. GAAP EPS of $0.48 rose 71% from the year-earlier quarter. Revenue of $15.7 billion grew a modest 1% year over year.

Now what: Management said demand is "more uncertain" because of the economy. For the fiscal year, management lowered its revenue from growth of 5%-9% to growth of 1%-5%. Despite the lower revenue expectations, it guided non-GAAP operating income for the fiscal year up, from growth of 12%-18% to growth of 17%-23%. Management chalked up its higher margin expectations to consistent execution in the first half of the fiscal year, continued management of lower-margin business, and a positive mix shift to Dell intellectual property and higher-valued products. If it can't keep revenue growing, however, the transformation can only take earnings growth so far.

Interested in more info on Dell? Add it to your watchlist by clicking here.

Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1540162, ~/Articles/ArticleHandler.aspx, 9/18/2014 8:10:25 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement