Dell Beats EPS, But Revenue Flat

Flooding in Thailand and pruned demand may be hurting Dell revenue, but the company managed to beat earnings expectations Tuesday.

The stock fell 31 cents, or 2%, to $15.28 after hours, losing the day’s gains.

Dell (DELL) reported earnings of $893 million, or 49 cents per share, for the third quarter of fiscal 2012, which ended in October, compared with $822 million, or 42 cents per share, in the year-ago period. Excluding one-time items, earnings were 54 cents per share, better than analysts expected by some 7 cents. Revenue was flat compared to last year.

BernsteinResearch analyst Toni Sacconaghi Jr. said earlier in the day that the beat was likely because of favorable pricing. Sacconaghi wrote Tuesday that:

“channel checks and recent earnings reports from enterprise companies point to relatively stable corporate demand (with some uncertainty around Europe, public spending, and financial institutions) … [but] Dell does hedge its revenues.” … We model a slightly more competitive PC pricing environment, with ASPs down 3% YoY vs. down 1% last quarter.”

With fiscal 2012 about to end, Dell increased estimates for fiscal 2012 revenue, but maintained them for operating income. On guidance, Sacconaghi that:

“We believe that Dell is more likely to be at the low-end of its revenue target for the year (we forecast 1.2% revenue growth for fiscal 2012, and are $300M+ below consensus for Q4), especially given the potential for HDD supply issues.”