Dell Plans to Cut 8,000 Jobs

Elena
01 Jun, 2007
New York City

The computer maker reported profit of $759 million, or 34 cents per share, compared with $762 million, or 33 cents per share last year. First-quarter sales advanced 1% from the year ago period to $14.6 billion. Analysts had expected earnings of 26 cents per share on sales $13.95 billion.

[R]8:15AM Dell Q1 profit slightly down. The computer maker plans to cut 8,000 jobs.[/R]
Dell Inc. ((DELL)) said late Thursday that preliminary Q1 profit came in slightly below expectations. The computer maker reported profit of $759 million, or 34 cents per share, compared with $762 million, or 33 cents per share last year. First-quarter sales advanced 1% from the year ago period to $14.6 billion. Analysts had expected earnings of 26 cents per share on sales $13.95 billion.

In addition, the computer maker said it was to planning to cut more than 8,000 jobs over the next year as part of a restructuring program. The layoffs represent 10% of Dell''s global work force of 88,100 employees. The job reductions came as a result of Dell’s struggle to regain market share after Hewlett-Packard Co. Dell shares advanced nearly 5% in pre-market trading.


[R]7:30AM NY-6:30PM Mumbai Sensex ends with modest gain on selling pressure in late trading.[/R]

The Sensex on BSE finished 26.29 points, or 0.18%, higher at 14,570.75.

The market-breadth was positive as 1,369 stocks advanced, 1,190 declined and 96 stocks remained the same. Of the 30 stocks in the Sensex, 17 advanced while the rest declined. The turnover on BSE was Rs 4,669 crore, slightly higher than Rs 4,536 crore on Thursday. On NSE, the turnover was Rs 9,872 crore, much lower than Rs 11,963 crore on Thursday.

Economic news

Wholesale price inflation decreased to 5.06% for the week ended May 19 from 5.27% in the previous week on softer prices of food articles like moong and wheat, and manufactured products.

The Reserve Bank of India will continue its policy to contain liquidity and inflation which may result in a hike in the cash reserve ratio, according to bankers.

India’s exports in the new fiscal 2008 showed an increase of 23% to $10.6 billion in April, compared with the same time a year earlier despite a sharp surge in rupee against the dollar.

Trading highlights

MIC Electronics was the most-active stock with a turnover of Rs 281.40 crore followed by Indiabulls Real and SBI.

Advancers

Cipla soared 3% to Rs 224. The stocks seems to attract interest again after it had dipped sharply, when it had reported poor results late last month. Satyam surged 2% to Rs 479.

Banking shares gained on an easy liquidity in the financial markets. HDFC Bank rallied 1.7% to Rs 1,159. ICICI Bank was up 1% to Rs 928 and State Bank of India added 1.9% to Rs 1,378. BHEL was up 1.1% at Rs 1,414, while Infosys gained 1% to Rs 1,940.

Decliners

Auto stocks performed the worst today, as they were under selling pressure. An increase in crude oil prices together with margin pressure worries weighed on the stocks. Hero Honda tumbled 2.6% to Rs 713, while Tata Motors shed 1.3% to Rs 747.

Bharti Airtel and Hindustan Lever were down over 1% each to Rs 838 and Rs 201, respectively. Index heavyweight Reliance Industries lost 0.6% at Rs 1,750 on 4.55 lakh shares. It soared to an intra-day high of Rs 1,779 and plunged to a low of 1,745.


[R]6:30AM European markets advance Friday on merger talk in utilities.[/R]

European markets were higher on Friday. By late morning, Frankfurt Xetra Dax added 0.7% to 7,934.85, the CAC 40 in Paris gained 0.5% to 6,135.32 and London FTSE 100 climbed 0.4% to 6,647.1. National benchmarks rose today in all of the 17 western European markets that were open except Portugal, Luxembourg and Greece.

Advancers

Iberdrola, the second-largest power company in Spain, surged 3.1%. Lafarge, the world biggest cement maker, advanced 1.9%. GBL owned by Belgian Albert Frere intends to raise more than 1 billion euros, or $1.3 billion by selling new shares. GBL is the largest shareholder in French utility Suez and holds a stake in Lafarge.

British Energy Group gained 2.8%. The U.K. government said it sold 400 million shares in British Energy, raising money to pay for the decommissioning of nuclear reactors owned by the country biggest power generator. Électricité de France, rose 2.6% after the head of the company raised the possibility of joint ventures with Gaz de France.

Reatlers were also higher. Metro, which had its price target raised by Bernstein, gained 3.4%, while Karstadt Quelle added 0.6%.

Decliners

Investment group GBL, reported to be considering a over 1 billion euros capital was down 0.4%.

Banca Italease plunged 13%. The stock slid 2.5% yesterday after MF reported that the chairman of the bank will soon present to the board the results of an internal investigation into the relationship between its chief executive and a real-estate investor who is facing criminal charges.

Commodities

Crude oil was virtually unchanged despite concern U.S. refiners are not increasing gasoline production fast enough to replenish fuel stockpiles for the summer. Crude oil for July delivery was $64.06 a barrel, up 5 cents, in after-hours electronic trading on the New York Mercantile Exchange. Brent crude oil for July settlement was trading for $67.86 a barrel, down 18 cents, on London ICE Futures exchange.

Gold advanced in London on indications that demand for jewelry and coins is strengthening. Silver gained for a second consecutive day. Gold rose $2, or 0.3%, to $662.50 an ounce. Silver advanced 3.5 cents, or 0.3%, to $13.47 an ounce

Currencies

The dollar gained against the euro ahead of a U.S. employment data Friday. The euro bought $1.3446 in morning European trading, compared with $1.3453 in New York late Thursday. The British pound edged down to $1.9791 from $1.9796, while the dollar rose to 121.89 Japanese yen from 121.73 yen.