Earnings Preview for Dell (DELL)

Dell DELL is expected to announce its Q1 earnings results on Tuesday, May 17. Analysts are expecting earnings per share to stand at $0.43, up 43.3% on $0.30 recorded in the same period last year. Revenues are predicted to be $15.4 billion, or 3.5% higher than in the same quarter last year. Dell is a technology company that offers a range of technology product categories, including mobility products, desktop personal computers (PCs), software and peripherals, servers and networking products, storage and services. Its services include a range of configurable information technology and business services, including infrastructure technology, consulting and applications, and product-related support services. Looking ahead, analysts expect earnings per share will grow at a much lower pace in the second half of the year. In the upcoming quarter, Dell is expected to report earnings of $0.44 per share, which represents a strong growth of 37.5% on a yearly basis. For the year as a whole, earnings per share growth should be reduced to mere 6.9%, however. Analysts expect 2011 earnings per share to be $1.70, not much higher than $1.59 recorded in 2010. Revenues should be a completely different story, as analysts expect revenue growth to accelerate in the second half of the year. In the upcoming quarter, Dell is expected to post revenues of $16.04 billion, or 3.2% higher than in the same period last year. For the whole year, revenues should stand at $64.61 billion, or 5.1% higher than in 2010. Some investors might be worried after the consumer PC segment declined by as much as 8% this quarter compared with the same period last year. As a result, Dell's Q1 earnings might be lower than analysts previously expected. Traders will be encouraged by the fact that Dell recently released a number of new products. It has also been diversifying its products to include security systems and to expand its service portfolio. Investors will monitor the performance of Dell's OEM XL program, which was designed to provide additional control and planning support for OEM customers with business exposure to rapid technology transitions and changes. “The Dell OEM XL program helps make it even easier for our worldwide customer base to take advantage of our robust V-Series™ appliance, which is a key delivery channel for our flagship Websense® TRITON™ solution,” said David Meizlik, director of product and marketing communications. In late April, Dell announced the next generation Dell Precision M4600 and M6600 mobile workstations and dual-socket Dell Precision R5500 rack workstation. These products were designed to building upon the company's heritage of delivering the highest-performing and most scalable workstation products. On Friday, Dell lost 1.74% of to close the week at $16.37. The performance of its shares has been astonishing in the last 30 days, however, after Dell added 9.72% to its value.