During its annual shareholder meeting in Austin, Tex., which the company also webcast live and which lasted less than an hour, the executives faced tough comments from longtime stock owners who sounded less than happy at the PC maker's current financial straits.
"The stock has gone down more than 50 percent since last year's stock holder's meeting," said Linda Bush, a Dell shareholder who had proposed a measure for the company to provide dividends.
"What is wrong? An internal thing that's not working? Perhaps a general housecleaning should be in order like a rival competitor did in 2004," Bush said, referring to Hewlett-Packard. "Now their stock price is up 30 percent and they pay dividends of 32 cents."
Dell founder and Chairman Michael Dell, who stood at a podium whil Bush made her remarks, reminded the gathered shareholders that the company's board of directors opposed the dividend proposal. In voting, it was defeated with those holding 93 percent of voting shares turning thumb's down.
Dell himself did not comment on his company's warning, earlier in the morning, that it now expected earnings per share of between 21 cents and 23 cents per share - a sharp drop from the 32 cents per share that marked the average of Wall Street analysts expectations measured by Thomson Financial Network.
CEO Kevin Rollins, in a presentation on the company's financial performance, chose to accentuate the positive to gathered shareholders. He noted that the company gained eight points of market share between 2000 and 2005, and that it was currently showing 14 percent growth compared to the industry average of 10 percent.
"We're managing the business for the long term, in a time of change and consolidation for all in the industry," Rollins told shareholders. He also reiterated that the company is taking several steps to reverse several quarters of disappointing earnings performance, including the investment of more than US$100 million to beef up its customer service and support capabilities, as well as the development of new products.
"We expect to deliver a greatly expanded product line in the second half of the year," Rollins said.
After earnings warning, Dell execs face shareholders
By Edward Moltzen on Jul 24, 2006 9:21AM