Obviously, not much. In fact, the stock is down about 20% since I warned investors to stay away from it on May 18. (See Earnings Guidance Revisited.)
Even though the stock had already lost about half its value during the prior year, I was convinced it would move lower because on May 18 Dell announced that it would no longer provide earnings guidance. Here is Dell's exact statement:
"Dell ended its practice of providing specific quarterly guidance for revenue and earnings per share and said it would focus forward-looking statements on long-term specific company and industry factors influencing performance. Dell does expect financial results for the second fiscal quarter of fiscal 2007 to be similar to its first quarter results."
Eliminating guidance is an ominous sign. Even though some individuals such as Warren Buffet claim that eliminating guidance is good for investors, the truth is that the refusal to provide guidance almost always coincides with a period of slowing growth. Coca-Cola's shares, for example, have barely budged since Warren Buffett convinced its management to stop providing guidance more than three years ago.
Yet today Dell came out with a warning. It gave explicit guidance for second quarter revenue and earnings. Both figures fell short of analysts' expectations. At one point, the stock was down more than $3 per share in reaction.
So is Dell providing guidance or not? Perhaps it just wanted to clarify that results would not "be similar to" the first quarter. Instead, it has created more confusion.
Some companies have a policy of providing guidance. Other companies have a policy of not providing guidance. Dell's policy seems to be that it won't provide guidance, except when it does.