Dell shares jumped more than 5% in late trading Thursday after the company beat Wall Street estimates and announced plans to lay off 10% of its workforce, or more than 8,000 employees.
Dell’s earnings of 34 cents a share, or $759 million, were eight cents better than analysts expected. Sales rose 2.8% from the year-ago quarter to $14.6 billion, handily beating $13.95 billion forecasts.
The results boosted hopes that Michael Dell’s return as CEO can reverse the company’s flagging fortunes.
“Our strategic intent is to simplify information technology for our customers by removing cost and complexity,” Michael Dell said in a statement. “No other company is as well positioned to unlock value for our customers — empowering them to implement simpler and smarter technology solutions.
“While reductions in headcount are always difficult for a company, we know these actions are critical to our ability to deliver unprecedented value to our customers now and in the future,” he added.
The company said its results demonstrate “early progress the company is making in its systematic effort to restore competitiveness to the core business, re-ignite growth and build solutions critical to customer needs.”
Dell benefited from a decline in component costs and a better product mix that boosted average selling prices.
Server sales were up 19% to $1.6 billion, and storage revenues climbed 13% to $500 million. Mobility sales grew 7% to $4 billion, while desktop revenues fell 6% to $4.9 billion.
Because of Dell’s ongoing accounting problems, the company released only limited financial data and did not hold a conference call to discuss the results. The company has not filed complete results in a year.
Stocks were mixed a day after the S&P 500 set its first all-time closing high in more than seven years, as news that the economy skidded to a halt in the first quarter restrained buyers. Friday’s monthly government jobs report will be watched closely for clues to second-quarter growth.
Ciena soared 17% on its results, and Novell
and Semtech
gained on their earnings reports.
Optium lost ground on its results, while ValueClick
fell 6% on news of a new CEO.
Red Hat surged on a Baird upgrade.
The Nasdaq rose 12 to 2604, the S&P 500 added a fraction to 1530, and the Dow slipped 5 to 13,627. Volume rose to 3.34 billion shares on the NYSE, and 2.47 billion on the Nasdaq. Advancing issues led by a 18-13 margin on the NYSE, and 18-12 on the Nasdaq. Upside volume was 56% on the NYSE, and 66% on the Nasdaq. New highs-new lows were 348-28 on the NYSE, and 220-37 on the Nasdaq.
