From its laptop batteries catching fire to seeing its earnings halve, topped off by a US Securities and Exchange Commission (SEC) inquiry, Dell had a nightmare week.
The world's largest computer maker said on Thursday that its second-quarter net profit tumbled 51 percent from the same period last year to US$502 million.
Dell had warned investors that its profit growth was likely to have slowed during the quarter as it vies to beat off aggressive price competition from the likes of Hewlett-Packard and other rivals.
Dell's share price is down 26 percent since the start of the year, while Hewlett-Packard's is up 23 percent.
Dell recently announced it would now use microprocessors from Advanced Micro Devices (AMD) for the first time in a bid to fend off such competition, ending an exclusive partnership with Intel.
The week got worse when Dell said it had started an internal probe into some of its accounting methods, after revealing that the SEC was investigating its accounting and reporting practices.
Rollins said that Dell had received a letter from the SEC last August "asking us about a fairly broad level of questions on some revenue recognition."
The company was loath to detail more about the probe and said it had been under no obligation to reveal its existence earlier.
That was not welcomed on Wall Street, which was also aghast at last Monday's news that Dell was launching the biggest electronics recall in US history after Sony-made batteries in its laptops displayed a habit of catching on fire.
A Web site set up by Dell to handle the recall of 4.1 million laptops was inundated with over 1 million hits last Tuesday alone, according to Internet monitoring firm ComScore.
Reports said customers were in for a lengthy wait for a new battery cell from Dell.
The Consumer Electronics Association said Dell's "quick action" on the battery issue had probably limited the impact. But Carmi Levy, senior analyst at research group Info-Tech, said it was a wake-up call to computer makers.
"The propensity for these devices to explode has been known for some time, and regulatory bodies and manufacturers need to turn up the heat on solving these issues," he said.
Dell, however, played down the recall's impact on its earnings. Sony will have to foot a fair share of the total costs, estimated at US$200 million to US$400 million, according to analysts.
For Dell, it all contrasted unfavorably with the week enjoyed by Hewlett-Packard, which reported forecast-beating net earnings of US$1.375 billion in its fiscal third quarter.
"We gained share without sacrificing margins and continue to execute well against our long-term plan," HP chief executive Mark Hurd said.
In contrast, some on Wall Street are questioning the direction in which Dell is headed.
Many analysts, for instance, had clamored for the firm to diversify away from Intel chips but amid the bad news, even the AMD deal is now being questioned.
"In processors, Dell is paying a near-term price for its decision to end its exclusive relationship with Intel," Citigroup analyst Richard Gardner said.
The CIA has a message for Chinese government officials worried about their place in Chinese President Xi Jinping’s (習近平) government: Come work with us. The agency released two Mandarin-language videos on social media on Thursday inviting disgruntled officials to contact the CIA. The recruitment videos posted on YouTube and X racked up more than 5 million views combined in their first day. The outreach comes as CIA Director John Ratcliffe has vowed to boost the agency’s use of intelligence from human sources and its focus on China, which has recently targeted US officials with its own espionage operations. The videos are “aimed at
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
US Indo-Pacific Commander Admiral Samuel Paparo on Friday expressed concern over the rate at which China is diversifying its military exercises, the Financial Times (FT) reported on Saturday. “The rates of change on the depth and breadth of their exercises is the one non-linear effect that I’ve seen in the last year that wakes me up at night or keeps me up at night,” Paparo was quoted by FT as saying while attending the annual Sedona Forum at the McCain Institute in Arizona. Paparo also expressed concern over the speed with which China was expanding its military. While the US
SHIFT: Taiwan’s better-than-expected first-quarter GDP and signs of weakness in the US have driven global capital back to emerging markets, the central bank head said The central bank yesterday blamed market speculation for the steep rise in the local currency, and urged exporters and financial institutions to stay calm and stop panic sell-offs to avoid hurting their own profitability. The nation’s top monetary policymaker said that it would step in, if necessary, to maintain order and stability in the foreign exchange market. The remarks came as the NT dollar yesterday closed up NT$0.919 to NT$30.145 against the US dollar in Taipei trading, after rising as high as NT$29.59 in intraday trading. The local currency has surged 5.85 percent against the greenback over the past two sessions, central
RSS