Dell Inc. (DELL) To Report What Could Be Last Earnings

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This evening (2/19), Dell Inc. (NASDAQ:DELL) is scheduled to report its 4QFY13 earnings results with a conference call at 5:00 PM EST. Given the growing discontent around the $13.65 privatization price tag, it will be interesting to see how the Company handles the call. Assuming the proposed privatization of Dell is successful, this is likely to be Dell Inc. (NASDAQ:DELL)’s last earnings call for at least a few years (until the IPO).

Dell Inc. (DELL) To Report What Could Be Last Earnings

Analysts at expect the company to guide the April quarter in line or better vs. consensus at $13.6 billion in revenue and $0.38 in EPS. This is helped by low expectations looking for a 6% Y/Y decline in revenue and 12% Y/Y decline in EPS. However, they believe that what may loom larger is the uncertainty around the future of the company given the buyout proposal. This may cause some customers to hold off purchases until there is more clarity.

Analysts at Mizuho Securities have a nice run down of what to expect on the call:

Given the speculation about Dell Inc. (NASDAQ:DELL)’s LBO toward the end of the quarter, the analysts believe that the company’s business likely took a slight hit. They expect revenues to be slightly below consensus of $14.1B (up 3% Q/Q) while EPS should be in-line with consensus of $0.39. Management had guided for revenues to be in the $14.0-14.1B range and EPS to be at least $0.38. For profitability, the analysts expect the company to benefit from the inclusion of Quest for the full quarter and post sequentially flat gross and operating margins.

Gartner’s 4Q12 data and Mizuho channel checks indicated that Dell Inc. (NASDAQ:DELL) remained highly focused on the profitability of its transactions and shied away from lower margin PC business, especially if it did not include any data center component. The company experienced over 20% decline in units shipped during C4Q12, which will impact its performance in the quarter. In servers, macro remains an overhang on the overall market while networking will likely post double digit growth for Dell.

Given the ongoing discussions about taking the company private, Mizuho analysts believe that management will likely refrain from making any forward looking statements. The company would have normally offered F1Q14 and FY14 earnings forecast as well as revenue outlook for F1Q14. They believe the current consensus calling for a 2% decline in revenues and EPS in FY14 is reasonable. For F1Q14, consensus is looking for a 5% fall in revenues and 14% drop in EPS, which are unlikely to change after the call.

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