Dell Inc. Chairman Michael Dell Tuesday threw his support behind Chief Executive Kevin Rollins and promised the computer maker was “working diligently” to resolve its mounting problems.
Just a day after the PC maker delayed filing of its quarterly financial report and canceled a key meeting with analysts, Michael Dell defended Rollins an “an outstanding executive” in response to a question at a company event in New York.
When asked during a question and answer session about any plans to remove Rollins, Dell said that “it is not going to happen” and called such speculation ”useless.”
But he declined to offer more details on the accounting probe, other than to reiterate plans to cooperate with investigators and pledge to resolve any issues.
Dell, who built the company into the No. 1 PC maker from a dorm-room start-up, also offered to share responsibility for the company’s problems, which include an accounting probe, earnings shortfalls and a massive product recall.
“Kevin and I run the business together, so if you want to blame him, blame me too,” he said, speaking at an event to roll out the company’s latest technology.
Shares of Dell were up 37 cents at $21.56 on the Nasdaq.
“Michael has been pretty consistent, since (their) earnings have disappointed, saying that he supports Kevin,” said analyst Bill Fearnley of FTN Midwest Securities.
Dell, facing competition from Hewlett-Packard Co. and complaints about poor after-sale service, reported last month its quarterly profit dropped more than 50 percent.
On yet another front, Dell, based in Round Rock, Texas, is recalling 4.1 million notebook computer batteries, which resulted from concerns about them catching fire.
Now, probes by the U.S. Securities and Exchange Commission and the Manhattan U.S. Attorney point to the possibility of misstatements in prior-period financial reports.
Rollins, during his presentation at Dell’s technology day Tuesday, said the company was “committed to doing everything at Dell better” and described a ”spirit of revitalization.”
One shift for the company is its experiment with opening its own retail stores, in contrast to its historic approach of selling its products via the Web or on the telephone.
Dell opened its first store in Dallas a few months ago and said Tuesday the site is exceeding expectations. Plans call for it to open a New York store in 2007, and possibly others depending on the success of its experiment.
“It’s a radical departure, but a number of other competitors are either doing it with resellers or their own stand-alone stores or both,” said FTN Midwest analyst Fearnley.
Rollins also announced the company is extending through 2011 a multibillion dollar deal with the world’s biggest data storage maker, EMC Corp..
Under the deal, which is five years old, Dell manufactures and resells EMC network data storage systems and software corporations. EMC develops the storage systems and software.
But Rollins largely sidestepped an audience question about his future, saying “there’s a number of individuals that make that determination, not the media and not the press.”