Dell reports its fiscal first-quarter results after the market closes Thursday. How should you be positioned into the results?
It seems Michael Dell and company are facing some blustery headwinds – to say the least. According to research groups, PC shipments sank about 7 percent worldwide in the first three months of the year.
Also Dell lost the top spot as our nation’s number one computer maker to Hewlett-Packard.
Ontop of that, this time of year is seasonally slow for Dell. Its busiest times are the back-to-school and holiday shopping months.
What should you expect?
On average, analysts surveyed by Thomson Reuters expect Dell to post a profit of 23 cents per share on $12.7 billion in revenue.
Kaufman Bros. analyst Shaw Wu cut his quarterly estimates for Dell last week. In a note to clients, he wrote that Dell was hurt by its reliance on business customers, which continue to struggle with the economic crisis.
Doug Reid, a Thomas Weisel analyst, is also somewhat bearish. He wrote in a May 18 note that he believes Dell laptop demand fell 10 percent to 15 percent from a year ago based on commentary from one of the PC maker's notebook manufacturers.
What’s the trade?
I love the stock but I don’t see a growth driver for Dell, counsels Pete Najarian. Instead, I think the trade is the company that’s winning share away from Dell – and that’s Hewlett Packard.
I’m hearing that all the bad news in Dell is out already, counters Steve Grasso. I think we know all the negatives and the risk of being long Dell is limited.
In the space I’m long IBM, adds Joe Terranova.
Got something to to say? Send us an e-mail at firstname.lastname@example.org and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send your e-mail to email@example.com.
Trader disclosure: On May 27th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Terranova Owns (ABT), (TER), (XBI), (RIMM), (IBM); Terranova Is Short (XOM) Call Spread; Terranova Owns (DIS) Call Spread; Najarian Owns (ISIS); Najarian Owns (AMAT) Calls; Najarian Owns (BX) Call Spread, (INTC) Call Spread, (MOS) Call Spread, (XHB) Call Spread, (XLB) Call Spread, (XLU) Call Spread; Grasso Owns (V), (XLF), (RIMM), (AMZN); Grasso's Firm Owns (MSFT); Grasso's Clients Owns (JPM), (OXY), (AMR), (V)