Dell Inc. added to its litany of woes on Monday when the world’s largest PC maker said it would not file its second-quarter earnings report to government regulators on time because of “questions raised” by an informal Securities and Exchange Commission investigation.
The company said in a statement that investigations have shown it may have misstated prior financial reports, including issues relating to accruals, reserves and other balance sheet items.
Dell also disclosed that the U.S. Attorney for the Southern District of New York had subpoenaed documents related to its financial reporting from 2002 to the present.
The Round Rock, Texas, company said it has not yet determined the material impact of any of the accounting issues.
“We are fully cooperating with the investigations and working to resolve any and all issues raised in connection with those investigations as quickly as possible, and we will take any appropriate remedial or corrective actions to address any problems,” Chairman Michael Dell said in a statement.
Last month, Dell issued a voluntary recall of 4.1 million potentially flammable laptop batteries made by Sony Corp. It was the largest-ever electronics recall in the history of the U.S. Consumer Product Safety Administration.
The company said it plans to file the second-quarter report as soon as possible but didn’t offer a more specific timetable. Third-quarter earnings are scheduled to be posted Nov. 16.
It’s believed to be the first time Dell has ever missed a quarterly filing, said spokesman Bob Pearson, who declined to comment beyond what was in the news release.
“This particular news couldn’t come at a worse time for Dell, given all of the problems,” said Tim Bajarin, analyst with Creative Strategies.
Dell grew to prominence on a patented, direct-sales model to consumers and businesses but has been rattled in recent months as it revamps its customer service programs and deals with fierce competition from rivals such as Hewlett-Packard Co.
Dell first disclosed the accounting probe in last month’s quarterly report, in which revenue plummeted 51 percent.
At the time, Dell officials played down the probe’s significance and said they didn’t expect it to have any material impact on the company’s bottom line.
Dell also postponed its annual analysts meeting planned for Wednesday in New York but did not say when or if the event would be rescheduled. The company is holding two Web conferences with Dell and Chief Executive Officer Kevin Rollins on Tuesday to provide a company update and show new products.