This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Time to Sell Dell, Buy Cisco and HP

Stocks in this article: DELL CSCO HP AAPL MSFT

NEW YORK ( TheStreet) -- Giving computer giant Dell (DELL) the benefit of the doubt is something that has always come easy for me. However, while its chief rival in Hewlett-Packard (HPQ) is seeing light at the end of the tunnel, Dell makes me think that the light that it sees is an incoming train -- one that it simply is unable to avoid.

On the heels of another disappointing quarter for the company, I think Dell has now reached a point where it needs to reassess its strategy and start thinking about its future. As bad as things once looked for the company, Wall Street is starting to get a sense that things just may be getting worse.

The company reported first-quarter earnings of 43 cents per share on revenue of $14.4 billion. This compares to analysts' estimates of 46 cents per share on revenue of $14.9 billion. So not only did the company miss on both the top and bottom lines, but revenue arrived 4% lower than the same period of a year ago while also demonstrating declines in some key segments.

For example, aside from the fact that a decline was seen in its large enterprise revenue which came in at $4.4 billion, the company also continued to lose in that once-special consumer market where it lost 12% in the quarter to $3 billion. What this says is that as it is losing consumers to Apple (AAPL), it is also struggling against the likes of HP and Cisco (CSCO) to keep its footprint in the enterprise.

During the announcement, the company talked about its transition away from PC sales while citing revenue increases in areas such as storage, servers and network equipment and services. The company's CEO, Michael Dell said, "We're committed to continuing our strategy to reshape Dell's business as an end-to-end IT provider."

It all sounds great, however these are key markets that are already dominated by names such as EMC (EMC) and IBM (IBM) as well as HP and Cisco. Its earnings already suggest it is not competing effectively in areas it once dominated, so it is a bit challenging to be optimistic about its entry and focus in it non-core areas.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs