DELL IN FORMAL SEC INQUIRY

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DELL IN FORMAL SEC INQUIRY

 user 2006-11-16 at 12:20:00 pm Views: 51
  • #16878

    Dell in Formal SEC Inquiry, Delays Filing
    DALLAS
    (Nov. 06) – Dell Inc. said Wednesday that federal regulators had begun
    a formal investigation into the computer giant, which had been part of
    an informal inquiry since August.Dell also said it was postponing the
    release of its third quarter earnings report – scheduled for Thursday
    after markets close – until sometime later in the month.The company
    said the earnings report delay was unrelated to the widening Securities
    and Exchange Commission probe.A company spokesman told The Associated
    Press that the company did not know what the SEC was specifically
    investigating.In a press release issued late Wednesday, Dell said the
    delay was due to the “level of complexity the company is facing in the
    preparation of its preliminary results.”"Dell continues to cooperate
    with the SEC, and is committed to resolving all issues in connection
    with the investigation and regaining compliance with all SEC filing
    requirements as soon as possible,” the company added.Rob Enderle, an
    analyst for the Enderle Group, said it was too early and there just
    isn’t enough information to know what the implications of the formal
    investigation could be for Dell.”This is pretty serious,” he said. “It
    looks like they’ve got a significant discrepancy that they can’t
    reconcile. My guess is it’s something that they misclassified. The
    thing is, we don’t know enough other than that there are problems.”The
    third-quarter report will be posted as press release and won’t include
    the usual conference calls where analysts and reporters can ask
    questions of founder Michael Dell and Chief Executive Kevin
    Rollins.Analysts, on average, had been looking for third-quarter
    earnings of 24 cents per share on sales of $14.44 billion, according to
    a poll by Thomson Financial.Dell has yet to file its second quarter
    earnings with federal regulators because it has been trying to resolve
    unspecified accounting issues with its internal audit
    committee.Wednesday’s news is the latest blow for the Round Rock, Texas
    company, which lost its No. 1 ranking in personal computer shipments to
    rival Hewlett-Packard Co. in October, according to market research
    firms IDC and Gartner Inc.Two days before posting disappointing
    earnings in August, Dell recalled more than 4 million faulty laptop
    batteries made by Sony Corp.Sony-made batteries have since been
    recalled by nearly every laptop maker in the world, including Toshiba
    Corp., Apple Computer Inc. and Lenovo Group Ltd.Dell shares gained 16
    cents to close at $25.75 on the Nasdaq Stock Market on Wednesday before
    tumbling 75 cents to $25.16 in after-hours trading.