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Dell's So-Called Earnings

It's likely to post a sales decline and not hold a conference call.


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isn't keen on making a big show of its latest quarterly results -- if its decision to do away with the customary analyst conference call is any indication.

It's hard to blame the company.

The results released Thursday will represent an unpleasant milestone for the PC maker. For the first time since 2001, the Round Rock, Texas, company is expected to post a year-on-year decline in its quarterly revenue growth.

Analysts polled by Thomson Financial expect Dell to report fourth-quarter revenue of $14.87 billion, representing a 2% decline from the $15.2 billion Dell reported a year ago. The average analyst expectation calls for Dell to earn 29 cents a share.

Wall Street initially expected Dell to earn 32 cents a share and $15.3 billion in sales, but the company warned in January that results would fall below those estimates.

The sales decline doesn't come as a complete surprise. During the past several quarters, Dell has seen its sales growth slow from a 17%-20% range to anemic single-digit levels, as increased competition, poor execution and customer service issues have conspired against the company.

The company's stock isn't faring much better, down roughly 26% from its 52-week high of $30.80, closing Wednesday at $22.85.

What's more,

Dell is under investigation by the

Securities and Exchange Commission

for certain of its accounting practices. Because of the investigation, Dell will provide only limited financial information Thursday (the company is not expected to provide a balance sheet or statement of cash flows).

The dip into negative sales growth, however, seems to have shaken Dell into action. Last month, founder

Michael Dell returned to the CEO role, replacing Kevin Rollins.

Dell has since enlisted a pair of marquee hires to

head up the company's global operations and a new consumer group. And the PC maker brought in former


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CEO Donald Carty as its new financial chief in January.

How the new team intends to turn Dell around is still something of a mystery, which won't become any less opaque for investors because of the lack of a conference call after the earnings report.

More than half of the analysts covering the stock currently recommend sitting on the sidelines, with hold or neutral ratings.

"While we view recent management changes as progress, we wonder if real change can and/or will be implemented," wrote American Technologies Research analyst Shaw Wu in a recent note to investors.

Wu wonders how much more efficient Dell can make its supply chain, and he believes that the PC maker needs to experiment with retail sales in order to fully address the consumer and international markets -- something Dell has so far shown an unwillingness to do.

Goldman Sachs analyst Laura Conigliaro believes that Dell will have to lower its financial projections once again, given the current state of its business and the long-term nature of the fixes planned by the new management team.

That could leave Dell's stock in a holding pattern until margins begin to improve, wrote Conigliaro.

Goldman Sachs makes a market in Dell shares and has received compensation from Dell for investment banking and non-investment banking services in the past 12 months.

There's no telling whether Dell will even provide guidance Thursday. In the third quarter, when Dell was under similar constraints from the SEC investigation, the company offered only generalities about its outlook, stating that near-term improvement in growth and profitability "may not be linear."

Since that time, the underwhelming introduction of


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new Vista operating system has dashed hopes that the PC sector will get a shot in the arm during the seasonally slow first half of the year.

And recent reports that rival


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is planning to ax 1,000 jobs suggest that sluggish PC sales are widespread.

Whatever rescue plan Michael Dell and his new team are putting together, investors will have to sit tight until they're filled in.