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Talk about a confusing report: Dell reports 31 cents a share on $15.99 billion in revenue and at first blush the news seemed almost devastating.

The conventional wisdom going into the report was that expectations had been lowered so significantly that Dell

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[DELL  Loading...      ()   ] should have no trouble at all beating them. But both categories were dramatically below Street estimates of 36 cents a share on $16.27 billion.

Which is exactly what I said on TV as the numbers came across the wire. But then, I got a chance to quickly scan the press release and after doing some back-of-the-envelope math, I got a decidedly different story.

Yes, revenue missed, but if you put back in a number of one-time charges, it would appear Dell beat on the bottom line, which is what I came back on TV moments later to explain. The company detailed a number of these charges that took so much of us by surprise, that even Thompson Financial is holding off on figuring out the exact, apples to apples EPS comparison. Consider:

*$83 million in expense, or four cents per share, related to the write-off of in-process research and development resulting from the acquisitions of EqualLogic and Everdream;

*$54 million in expense, or two cents per share, related to business realignment, including severance costs and facility closures;

*$27 million in expense, or one cent per share, in investigation related costs;

*$11 million in amortization expense of purchased intangible assets;

*A reduction in a litigation reserve related to copyright levies of $58 million, or three cents per share; and,

*A $44 million expense reduction, or one cent per share, related to an annual true-up for the full-year of stock award forfeiture credits related to SFAS123R stock-based compensation expense.

Add those pennies back in, all eight of them, and you'd get 39 cents a share, which has Dell beating the Street handily. And that makes sense when you dig a little deeper to see that gross margins actually enjoyed a 4 percent sequential increase, one of the key metrics Wall Street was looking for in this report. Further, even though Dell missed on its top line, that may not be that big of a headline if the company was indeed able to transfer more of those sales to the bottom line.

Dell says it has now reduced global headcount by 3,200 people, another key issue Wall Street was tracking. The company will buy back $1 billion worth of its stock which should also help increase EPS by reducing the number of shares outstanding. Dell also reporting a 25 percent increase in consumer PC shipments, and tracked a 3 percent unit share increase, the largest quarterly gain in three years.

Once we get the EPS number squared away, it'll be interesting to see how the Street reacts. Remember that Dell no longer provides any meaningful guidance, which should make for some fascinating analyst follow-ups tomorrow. Wall Street hates uncertainty and even though we have the numbers, it's gonna take some calculators to turn these uncertain numbers into something certain. As I work through them, this report doesn't seem nearly as bad as it did at first blush.

Questions?  Comments?