UPDATED: Michael Dell is taking back his troubled company.
Dell’s founder and chairman took back the CEO role
today, with Kevin Rollins resigning after a tumultuous period in which the
company posted lackluster sales and failed to file earnings for consecutive
quarters.
The computing systems maker also said in a statement that it expects its
fourth-quarter fiscal year 2007 results to be “below the average of First
Call estimates for both revenue and earnings per share,” dealing another
blow to the reeling company.
Dell will retain the chairman role, seeking to right the ship and propel the
computer systems vendor into what he calls Dell 2.0, in which the company
plans to adapt its computers, servers and other devices to the changes
fostered by Web 2.0 applications, such as wikis, mashups and blogs.
Dell spokesperson Dwayne Cox told internetnews.com that the move was
a resignation, not an ouster, noting that the company feels this is the
right thing to do to move forward.
Though hardly surprising, the move is a certain about-face, coming after
Dell defended Rollins’ performance and ability as CEO, and repeatedly denied
that he would replace him even as shareholders called for that action.
At an event in
New York last September, Dell said he disagreed with press and analyst
comments that Rollins isn’t the right man to lead Dell. He even called
Rollins an “excellent executive.” On the possibility Dell would replace
Rollins, he said: “It’s not going to happen.”
Cox refused to comment on the events that led to the change at the top, but
the investigations into the company’s finances, which led to the delay of Dell’s
second and third-quarter earnings reports, along with indications of weak
sales, triggered the action.
Six weeks ago, Dell
said it would again delay filing third-quarter earnings results due to the
ongoing investigations into its finances.
Those investigations, by the Securities and Exchange Commission (SEC), the
U.S. Attorney for the Southern District of New York and Dell’s audit
committee, concern the possibility of financial misstatements.
In conjunction with the delay, the computer maker also acknowledged that it
received a notice of possible delisting from the Nasdaq stock market for
failure to report Q3 earnings.
The warning came three months to the day after Dell received a delisting warning from the market for failure
to report Q2 earnings, which it still has yet to do.
And reports of batteries exploding in Dell laptops last summer did not help matters.
“Dell has tremendous opportunities ahead of it,” said Dell in a statement.
“I am enthusiastic about Dell 2.0, which includes our plan to provide the
best customer experience, build a strong global services business and ensure
our products deliver the best long-term customer value.”
“The Board believes that Michael’s vision and leadership are critical to
building Dell’s leadership in the technology industry for the long term,”
said Samuel A. Nunn, presiding director of Dell’s board.
Shares of Dell had jumped by about 5 percent to $25.21 in after-hours trading.
