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David Einhorn Swings at Apple, Hits Dell: Tech Weekly

Amid plans to go private, struggling computer maker Dell reported moderately better-than-expected earnings, led by the company's networking business.

The Round Rock, Texas-based company reported fourth-quarter non-GAAP earnings of 40 cents a share on $14.3 billion in revenue, down 11% year over year, but up 4% over the previous quarter. The company noted that networking was strong, with revenue from this segment growing 42%.

Analysts polled by Thomson Reuters were looking for earnings of 39 cents a share on $14.1 billion in revenue.

In a Thursday presentation on Apple, Einhorn, who doesn't hold Dell shares, inserted himself into the company's plans to go private in a deal with founder Michael Dell and private equity firm Silver Lake Partners.

Einhorn criticized Dell's deal, arguing that the company's multibillion-dollar cash hoard is helping to pay for the leveraged buyout instead of going to investors.

"Dell's go-private effort shows the disingenuous nature of hoarding cash," he said during a conference call held to explain his proposal for Apple to issue a perpetual preferred stock dividend.

Dell shares ended the week up 2.1% at $13.92.

Dell wasn't the only struggling hardware giant to report better-than-expected earnings. PC giant Hewlett-Packard saw its shares surge after reporting smaller-than-expected revenue and profit declines on Thursday, and improving cash flow dynamics.

All units of the company reported revenue declines, a signal of the work left in the company's turnaround.

HP Investors Heave Sigh of Relief, but Challenges Remain

HP reported first-quarter revenue of $28.4 billion, down from $30 billion a year earlier but above Wall Street's forecast of $27.79 billion. Excluding items, it earned 82 cents a share, down from 92 cents but well above the consensus estimate of 71 cents. Earnings also surpassed HP's forecast of 68 cents to 71 cents.

For the second quarter, HP expects earnings, excluding items, of 80 cents to 82 cents a share. Analysts surveyed by Thomson Reuters were looking for earnings of 77 cents. The Palo Alto, Calif.-based firm predicts full-year earnings of $3.40 to $3.60 a share, well above Wall Street's estimate of $3.32.

On an earnings call, CEO Meg Whitman was also quizzed about a possible breakup of HP, but she reiterated her aim to keep the company intact.

"We have no plans to break up the company, and I have said many times that I feel we're greater and stronger together," she said in response to an analyst's question. "Importantly, customers want this company to be together."

HP (HPQ - Get Report) shares gained 14% during the week's trading to close at $19.20 on Friday.
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