Dell returns to public markets with impenetrable figures


Dell Technologies Inc. has reverted to Wall Street as a publicly traded company with such impenetrable financial results that average investors practically needed accounting degrees to decipher them.

On Thursday, the computer and storage company, which reverted to a public company at the end of December, announced a fourth-quarter GAAP loss that doubled, with revenue growth of 9% to 23, $ 8 billion. In his press release, Dell

DELL -0.76%

did not report earnings per share or an outstanding share account to calculate its earnings. He told investors a slide show made available during the conference call with analysts.

Investors and analysts who follow the company closely are not surprised by the complexity of its financial statements, given the complicated trajectory it has followed to return to public markets, a transaction in which it bought back the shares. follow-up to its participation in VMware Inc.

VMW, -2.39%

, called the class V shares. Another element that played a role is its mega purchase of the EMC storage giant in 2015.

The revenue slides for these two transactions have detailed implications in the footnotes, including the inclusion of non-GAAP income figures, which, Dell adds, included accounting adjustments for non-cash purchases primarily related to the merger of EMC.

Only one analyst of the company's call seemed to be bothered by the presentation of his complex financial statements, when he asked for more details on earnings per share. "The recommendations are quite encouraging and it's easy to align our model with it until we reach the EPS line," said Paul Coffner, an analyst at JP Morgan. "I'm just wondering if there is anything in" other income "or can you give us a little more detail about the net interest expense for the year so that I can determine what the delta is here? "

Dell has not given quarterly guidelines. However, he gave guidance for fiscal year 2020, revenue and profits, on page 17 of his slide show. The forecast for GAAP for the full year 2020 is between $ 92.7 and $ 95.7 billion, and for the non-GAAP year is $ 93 to $ 96 billion. dollars. Earnings per share under GAAP were estimated to be between 81 and 16 cents, while non-GAAP earnings per share included earnings between $ 6.05 and $ 6.70, and seven footnotes were attached to the chart. , explaining some of the differences, such as differences in tax rates and debit interest due to the class V VMware transaction.

Most analysts consider Dell on a non-GAAP basis, which the Securities and Exchange Commission does not tolerate.

"It's a lot of moving parts," said Dan Ives, an analyst at Wedbush Securities. "Cash flow continues to be the focus of attention, as are Dell infrastructure solutions and customer solutions units, a primary goal for investors." Dell must continue to generate revenue stable cash flow to repay the large amount of debt that she has incurred. through these complex offers.

Ultimately, said Ives, Wall Street will exclude any one-time fees and transition costs related to Dell's decision to become a public company again. "Investors are looking above and beyond that." He also pointed out that Dell was attractive because it was a mature technology company, such as IBM Corp.

IBM, -0.75%

, Cisco Systems

CSCO, + 0.35%

and a few others, who could see a renaissance growth.

Dell's complex path to public markets and its debt will remain an albatross on its heels for years to come. But if Dell wants to be treated as a first-rate stock, like the Dow Jones Industrial Average

DJIA, -0.27%

IBM and Cisco components, it must present clearer financial results to investors.

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