Ahead of the bell: More erosion likely in Dell 4Q

Ahead of the bell: Dell's 4th-quarter report gives CEO a chance to discuss $24.4 billion deal

Associated Press

ROUND ROCK, Texas (AP) -- Dell Inc.'s fourth-quarter earnings report may be overshadowed by the first public remarks of CEO Michael Dell since he and a group of investors announced a deal to buy the struggling personal computer maker for $24.4 billion.

After the results come out Tuesday following the stock market's closing, Michael Dell is scheduled to review the results on a conference call beginning at 5 p.m. ET. The call will give analysts to ask Michael Dell to elaborate on the reason why he is trying to end Dell Inc.'s 25-year history as a public company and what his plans might be.

The proposed deal already is facing resistance from the company's two largest shareholders besides Michael Dell. Southeastern Asset Management and T. Rowe Price both contend the company is worth more than the $13.65 per share being offering by Michael Dell and a group led by Silver Lake. Southeastern believes Dell Inc. is worth $23.72 — about the same price the stock was trading at six years ago when Michael Dell returned for a second stint as CEO of the company that he founded as teenager in 1984.

Dell Inc. has been hurt by weakening PC demand as more technology spending shifts toward smartphones and tablet computers.

Michael Dell and his backers are betting the Round Rock, Texas, company will be better off trying to diversify its business beyond the PC market without facing Wall Street's pressure to boost earnings from one quarter to the next.

The numbers for the three months ending in January are expected to show Dell's revenue declined from the previous year for the fourth consecutive quarter. The latest drop could be the biggest so far, based on analyst forecasts calling for a 12 percent decrease.

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