Why the Reinvention of Dell Is Worth a Lookhttp://www.fool.com/investing/general/2012/08/22/why-the-reinvention-of-dell-is-worth-a-look.aspx Tim Brugger
August 22, 2012
At best, Dell's (Nasdaq: DELL ) fiscal 2013 second quarter is forgettable. At worst, it's downright depressing. Based on the drop in share price following Dell's Aug. 21 earnings announcement, investors are leaning toward the latter. But for long-term value seekers, the decline in stock price is ideal, for a number of reasons.
A quick recap
GAAP numbers provide good, apples-to-apples comparisons for investors considering buy, hold, or sell strategies since all costs, including one-time items, are included. For Dell, as it prepares to close its sixth acquisition of the year designed to broaden its enterprise business lines, non-GAAP results are also worth a look. Even after removing acquisition and settlement costs -- something non-GAAP reporting allows for -- Dell hardly killed it in Q2, but it does help to put things into perspective.
Non-GAAP net income, earnings, and operating income are down vs. fiscal 2012, too. Hey, the PC market is what it is. But the 13%, 7%, and 15% declines (respectively) on a non-GAAP basis are a bit easier to swallow, and arguably a more accurate measure of Q2 results considering Dell's acquisition activity.
Time to move forward