Dell Earnings Preview, What We’re Watching
Dell (NASDAQ:DELL) plans to announce its Q1 earnings for FY’12 on May 17th. The firm is fast diversifying its product range to include security systems, storage products, servers, etc. as well as extending its services portfolio as it moves away from the core PC business. Seasonal factors that the company normally experiences will see revenues decline sequentially this quarter. Dell traditionally competes with HP (NYSE:HPQ), Apple (NASDAQ:AAPL), Acer (TPE:2353) and Toshiba though as we wrote recently in Is Dell a Consumer PC Company? Not Really, Says Mr. Dell, Del is trying to move away from its perception as a PC maker.
We have a price estimate of $22.39 for Dell’s stock.
Dell Notebook & Netbooks Market Share
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Dell is focusing efforts on business spending rather than consumer spending to drive revenue growth this quarter. Around 78% of Dell’s revenue is enterprise focused, and the enterprise refresh cycle is helping support PC growth but only at modest levels.
Also tablets – most notably Apple’s iPad – have had a negative impact on the PC market, slowing down PC unit growth. The impact is mostly on the notebooks/netbooks as many people are adopting the iPad as an alternative option to using notebooks on the go. At a minimum, iPads & tablets seem to be causing many users to defer, if not eliminate notebook purchases altogether. [1]
Dell Server Shipments
While Dell is primarily known for its PCs, it is aggressively pushing into all aspects of the enterprise technology market with its new server, networking, and storage offerings. Dell’s new products are primarily targeted at enterprises looking to scale bandwidth and utilize more virtualized services.
Dell is currently the third largest server vendor in the world with 14.6% share in server market in 2010, well behind market leaders IBM & HP. [2]
See our full analysis of Dell’s stock here.
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