Dell knocks back Q3 results as SEC probe turns formal
HP gets all the glory
Dell today delivered a last minute disappointment to investors by delaying the release of its third quarter financial results. The delay comes as Dell tries to deal with an ongoing SEC (Securities and Exchange Commission) investigation into the company's financial reporting. In a statement, Dell revealed that the SEC has elevated the investigation to "formal" status.
Like rival HP, Dell was meant to hand out third quarter results when the US financial markets closed Thursday. The two companies had come to an arrangement that would allow financial analysts to attend both of their earnings conference calls. Such a compromise no longer proves necessary.
Dell's vast team of accountants and lawyers now think they can get the third quarter figures to investors by the end of the month.
"The move from the originally scheduled date of November 16 reflects the level of complexity the company is facing in the preparation of its preliminary results," Dell said. "This complexity arises out of the ongoing investigations by the Securities and Exchange Commission (SEC) and the company's Audit Committee into certain accounting and financial reporting matters, and the fact the company has not filed its Form 10-Q for the second fiscal quarter."
Dell has been unwilling to reveal much about the accounting issues in question. Investigators at the US attorney's office for the Southern District of New York also have a Dell investigation going and have requested documents from the vendor dating back to 2002.
Rather ironically, Dell recently issued an entire press release touting its policy of "ethical, accurate and transparent communication" via blogs, chat rooms and forums. We're sure that investors are anxiously awaiting a blog post detailing the accounting issues.
The bookkeeping struggles come as Dell tries to revive flagging PC and server businesses. HP recently overtook Dell as the top PC seller, and the company has suffered from lethargic server sales. Nonetheless, Dell's shares have jumped in recent weeks to almost $26 a share after falling below $20 per share. The price hike has come during a wide-ranging bull market in the US. ®