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Dell (DELL) has finally restated its earnings for the past few years. As you can see blow, the difference between the restatement and the original isn’t very much. Profits for FY ’06 were revised a little higher and the years before that were a little lower.

Original

Year.........Sales........Oper. Income.....EPS
2003.........$35,404.........$2,844...........$0.80
2004.........$41,444.........$3,544...........$1.01
2005.........$49,205.........$4,254...........$1.18
2006.........$55,908.........$4,347...........$1.46
2007.........$57,420.........$3,070...........$1.14

Updated

Year.........Sales........Oper. Income.....EPS
2003.........$35,262.........$2,738...........$0.77
2004.........$41,327.........$3,525...........$1.00
2005.........$49,121.........$4,206...........$1.18
2006.........$55,788.........$4,382...........$1.47
2007.........$57,420.........$3,070...........$1.14

Note that Dell’s fiscal year ends in late-January or early February so we’re currently in FY ’08.

Two things stand out. First, is the large amount of shares that Dell has bought back. In FY ’07, there were 14% fewer diluted shares than there were in FY ’03.

The other is the decline and fall of Dell’s operating margins. This is the key stat to watch in Dell. Not too long ago, Dell’s operating margins were around 11%. Today, they’re around 6%. In other words, you sell twice as much just to stand still.

Posted by edelfenbein at October 31, 2007 12:15 PM