Last night it was a tale of two cities for a couple of companies that sell to corporations and can be a decent barometer for corporate spending trends……
DELL reported strong earnings, despite a small revenue short fall, and raised both eps and revenue guidance for the full year. I can buy their earnings guidance, the company is apparently doing a good deal controlling costs, but raising their revenue guidance looking down the barrel of what will most certainly be a second half slowdown in the economy seems a bit aggressive…..DELL seems to have re-found their mojo, but lets not get cocky guys, a sustained recovery in your stock price will be predicated on your ability to manage and meet expectations….this company suffered for years with credibility issues and in my opinion I would rather be conservative with my stock at 52 week highs.
On the flip side, SPLS missed their earnings and revenue targets in the quarter and cut their guidance for the year by about 10% predicated largely on a more competitive pricing environment…..a disproportionate amount of SPLS’s sales go to businesses.
So my take away here is that DELL maybe a little aggressive in their forecast and with the stock outperforming lots of old tech, you may want to be a little cautious here in the name….