Morgan Stanley Comments on Dell F1Q Results

Morgan Stanley is commenting on Dell's DELL F1Q results. “We view tougher comps in commercial PCs and Servers (50%+ of revenue), more aggressive pricing across the hardware sector, and a moderating component cost environment as factors that increase the risk of a lower earnings run-rate in F2H12,” Morgan Stanley writes. “Assuming PC and server revenue grows 5-7% in 2H (better than F1Q12 actual growth), the remaining 1/3 of Dell's business (storage, services, software & peripherals) needs to grow 25%+ to hit the mid point of annual revenue guidance. These businesses grew just 4% in F1Q12 even after backing out the negative impact of EMC on Dell's storage business.” Dell closed Tuesday at $15.90.