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Digging Into Dell

Dell is on deck to release earnings after the close of trading today. Analysts polled by Thomson Reuters expect earnings per share of $0.37, with revenue of $15.71 billion for the fourth quarter.

Dell
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Dell

If Dellhits the target, that would mean an EPS growth of 32% compared to a year ago, with sales up 6%.

We’ll have full analysis and and we'll dig into Dell’s numbers when the earnings come out after 4PM ET today with Bill Fearnley, Managing Director at Janney Montgomery Scott and Brian Marshall, Senior Equity Analyst at Gleacher & Company.

Here’s a preview of what to look for from Dell.

Lukewarm on Dell

Marshall currently has a “hold” rating on Dell with a $13.50 price target. Marshall is waiting for the right entry point, he said “less than $11” a share. Fearnley’s feeling is “neutral” on the stock. Fearnley continues to be concerned about the “revenue mix of PCs at an estimated 55% of revenues and continued pressure on gross margins as we believe this is likely to limit upside to near term earnings.”

Listening on the Call

On the call this afternoon, Marshall will zero in on Dell’s “supply chain cost structure” and any guidance of the company’s plans for “more strategic deals.”

Fearnley thinks Dell has “interest in software, storage and services because they’re enterprise products and they’re looking for higher margins.”

Business v. Consumer

Both analysts expect Dell to benefit on the business side, as companies are in their “upgrade cycle” right now. However, “we remain concerned about Dell’s traction in the enterprise storage segment,” said Fearnley.

As for the consumer, Marshall pointed out the “consumer is a little more stagnant as replacement cycles continue to lengthen and tablets come on the marketplace.”

Disclosures:
Bill Fearnley’s firm Janney Montgomery Scott owns & has investment banking relationship with Dell.
Brian Marshall, with Gleacher & Company has no disclosures.

Tune In:

At 4PM ET today for post earnings wrap with Bill Fearnley, Managing Director at Janney Montgomery Scott and Brian Marshall, Senior Equity Analyst at Gleacher & Company.

Questions? Comments? Write toinvestoragenda@cnbc.com

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