Dell Inc. reports earnings for the first quarter on Thursday after the market close. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Having fallen behind Hewlett-Packard in PC sales, the world's second-largest computer maker is working on turning around its operations, focusing on notebook computers and emerging markets as well as growing both consumer and business lines. The company is also cutting costs, including thousands of jobs, to stay competitive.
Dell, which built its business on direct-to-consumer sales, has also begun expanding into retail in the U.S. and overseas. The company said in April it will begin selling its notebook and desktop PCs at Suning, China's second-largest electronics chain. It started selling computers at Gome, China's largest electronics retailer, last year.
Asia is an important region for Dell. In the fiscal fourth quarter, sales in the region rose 28 percent, offsetting smaller gains elsewhere.
BY THE NUMBERS: Analysts, on average, are expecting a profit of 33 cents per share on sales of $15.66 billion, according to a poll by Thomson Financial.
ANALYST TAKE: A healthy PC market and pricing might help Dell meet or beat expectations, wrote Wachovia analyst David Wong, though he noted that an "uncertain" U.S. corporate environment may be a risk.
Morgan Stanley analyst Kathryn Huberty recently upgraded Dell to "Overweight" from "Equal-weight," saying accelerated growth at the low-end of the server market is not yet priced into the company's stock. Because Dell's server revenue comes from the lower end of the market and is products are priced below its rivals, the analyst said the company will benefit from this.
Huberty expects Dell to report a "strong quarter," with initial signs of gains in the low-end server market.
Keith Bachmann, an analyst with BMO Capital Markets, called the April quarter "reasonable," and said Dell's gradually improving operating margins in the second half of this year will move the stock higher. He rates the stock "Outperform."
WHAT'S AHEAD: Dell said earlier this month that Donald J. Carty, hired as chief financial officer a year and a half ago to help lead the company's turnaround, will resign in June. He will be replaced by Brian T. Gladden, a longtime General Electric executive. Carty, who was chairman and CEO of American Airlines and its parent, AMR Corp., until 2003, will remain on Dell's board.
Also in May, Martin Garvin, Dell's vice president in charge of in charge of procurement and managing relationships with suppliers, decided to retire.
STOCK PERFORMANCE: Shares of the Round Rock, Texas-based company fell 7 percent during the quarter to close at $18.63 at the end of April. The stock has gained more than 15 percent since.