A Thomas Weisel Partners analyst late Thursday praised Dell Inc.'s cost-cutting efforts, even after the computer maker reported its fiscal fourth-quarter profit sank on a recession-related drop in tech spending.
Round Rock, Texas-based Dell said late Thursday that its profit for the period ending Jan. 30 fell 48 percent to $351 million, or 18 cents per share. The company's profit excluding one-time items totaled 29 cents per share, beating analyst expectations by 3 cents per share, according to a poll by Thomson Reuters.
Revenue fell 16 percent to $13.4 billion, missing the average analyst forecast of $14.2 billion.
Dell has been trying to lower its costs and indicated Thursday that it intends to see a $4 billion reduction by the end of fiscal 2011 — up more than $1 billion from the company's previous goal.
In a note to investors late Thursday, Thomas Weisel analyst Doug Reid called the results "solid" and said he is "incrementally more positive on Dell shares based on clear evidence of broad-based cost discipline."
The analyst kept his "Market Weight" rating for the stock, though, saying he is worried that weak demand for its products will limit its ability to beat earnings expectations in upcoming quarters.
Separately, Needham Co. analyst Richard Kugele said Dell's results were "consistent" with other large tech companies.
He said that the company's increased cost-savings plan leads him to "expect Dell to continue to focus on operational execution to prepare for the return of demand."
Kugele maintained his "Buy" rating but lowered his price target to $11 from $15, citing a lower multiple relative to competitor Hewlett Packard Co.
