David Einhorn Swings at Apple, Hits Dell: Tech Weekly

NEW YORK ( TheStreet) -- David Einhorn scored a small victory in his shareholder battle against tech Goliath Apple ( AAPL) this week, winning a court order to keep the company from eliminating its preferred stock, a vehicle the hedge funder says could be the key for returning billions in cash to investors.

Late Friday, a court blocked Apple's shareholder vote as a result of a lawsuit brought forward by Einhorn.

This may allow the famed short-seller turned activist to push a case for increasing the company's dividend as his fund, Greenlight Capital, adds to a more than half-billion-dollar Apple bet.

Einhorn and Apple were at the heart of a big week for a handful of tech titans that also included the earnings of struggling PC-makers Hewlett-Packard ( HPQ) and Dell ( DELL) and an all-important quarterly report from electric-car maker Tesla ( HPQ), as the company's founder Elon Musk tries to charge up excitement about its Model S sports car.

Although Einhorn's legal victory against Apple culminated a week of back and forth between the tech giant and its most vocal investor, the company also made headlines for new product speculation.

Rumors in February that Apple was developing its own smart watch drew a strong response from TheStreet's readers this week.

Of the 1,455 people who voted in a recent poll, 75% said they would buy an iWatch if Apple released such a product. Just 13% of respondents said "No," with another 13% saying they weren't sure.

A smart watch could be big business for Apple, which recently has faced concerns about its continuing innovation. Morgan Stanley analyst Katy Huberty believes the watch could be worth as much as $10 billion to $15 billion in annual revenue for Apple, assuming a $200 price point.

Meanwhile, speculation continued that Apple may ink a carrier relationship with China Mobile ( CHL) after Qualcomm ( QCOM) announced a new Long Term Evolution (LTE) chipset on Thursday, the RF360 Front End Solution, which for the first time ever offers a truly global 4G LTE design for mobile devices.

Investors, including Einhorn, aren't just thinking about Apple, even as the battle rages as to whether it is a $200 dollar stock or whether Google ( GOOG) can rise to $1,000.

Data released on Wednesday indicate that, as a result of its iPhone 5, Apple has taken the smartphone lead from Samsung.

Tech research firm Strategy Analytics reports that Apple shipped an estimated 27.4 million iPhone 5s during the fourth quarter, taking the smartphone crown from Samsung's Galaxy S3 and accounting for 13% of all smartphones sold globally. Some 17.4 million iPhone 4S were sold, up from 16.2 million in the previous quarter.

Samsung shipped 15.4 million Galaxy S3s, down from 18 million in the third quarter, when the device topped the smartphone charts. Together, Apple's iPhone 5 and iPhone 4S accounted for one in five of all smartphones sold globally during the fourth quarter, according to Strategy Analytics.

Apple shares ended the week down 5.1% at $450.81.

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) shares gained 14% during the week's trading to close at $19.20 on Friday.

On Wednesday, Tesla reported a wider-than-expected loss that drove shares sharply lower for the week.

Tesla reported a fourth-quarter non-GAAP loss of 65 cents a share on $306 million in revenue. Analysts polled by Thomson Reuters were looking for a loss of 53 cents a share on $298.2 million in revenue.

Still, as Tesla rolls out its highly-anticipated Model S, CEO Elon Musk indicated strong sales figures could push the company to a profit in coming quarters.

Demand is strong for the Model S, Musk said on the conference call.

For the full year, Tesla expects to deliver about 20,000 Model S units, with 4,500 of them in the first quarter. Tesla expects first-quarter gross margins to be in the midteens and rise toward its target of 25% in the second half of the year. "We really have very high confidence that we will have a profitable first-quarter," Musk said.

Tesla shares ended the week down 8.0% at $36.11.

-- Written by Antoine Gara in New York.

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