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  (Source: ens-newswire.com)
Dell is in buyout talks with two private-equity firms

In an attempt to one day resurface as a true competitor in the computer technology industry, Dell is looking to go private.

An anonymous source recently told Bloomberg that Dell is in buyout talks with two private-equity firms. The talks are in their earliest stages, so it's unclear if the buyout will go through.

Dell is likely looking to go private because it lost one-third of its value last year alone. PC sales are slow since PC demand can't keep up with that of mobile devices, and Dell has to hear about its financial failures from shareholders each quarter.

Dell's market value was $18.9 billion as of January 11. Its enterprise value is 4.4 times earnings before taxes, depreciation, amortization and interest for the last year, making it a lower valuation than every PC maker bigger than $1 billion with the exception of Hewlett-Packard.

Like some other PC makers, Dell was hoping that Windows 8's release would help boost sales of its hardware. However, Windows 8 device sales haven't been that impressive. While Microsoft happily announced 60 million Windows 8 licenses sold just last week, that doesn't mean Windows 8 devices are flying off the shelves. Dell is still waiting on a sales boost for devices like the Dell XPS 12 convertible tablet.

For the third quarter in 2012, Dell's profit fell 47 percent to 39 cents per share while revenue dropped 11 percent to $13.7 billion from a year previous (Wall Street expected $13.9 billion). Its net income fell from $893 million (49 cents per share) in Q3 2011 to $475 million (27 cents per share) in Q3 2012.

For the same quarter, Dell's PC shipments fell 8.3 percent from a year earlier.

Dell predicts fourth quarter revenue of $14 billion to $14.4 billion, which is a bit less than the $14.5 billion analysts were shooting for. In Q4 2011, revenue was $16 billion.

One good aspect is that Dell's shares increased 13 percent today after news of the possible buyout had spread.

Source: Bloomberg



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JIT process no longer good enough....
By rdhood on 1/15/2013 9:50:30 AM , Rating: 1
Dells claim to fame was the ability to tweak their manufacturing and assembly to wring out a profit. That was an advantage for a very long time. No more.

We have been saying for years that PCs/notebooks are commodity products. Well, so is the phone. Apple's bottom line is just about to realize that. Tablets will not be far behind. For Dell, though, all of this means very rough times ahead. They showed the world how to build at the lowest possible cost, and now everyone can do it as well/better than they can. They needed to start diversifying their product/service offerings at their peak of popularity (remember this? your getting a Dell, dude). Now is too late.




By 91TTZ on 1/15/2013 1:46:12 PM , Rating: 2
quote:
We have been saying for years that PCs/notebooks are commodity products. Well, so is the phone. Apple's bottom line is just about to realize that. Tablets will not be far behind.


Exactly.


"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer














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