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Associated Press
Dell Inc.’s XPS Ultrabook draws looks at the Consumer Electronics Show in Las Vegas last month. With a buyout in the works, Dell had a better fourth quarter than expected.

Dell ends 2012 better with buyout looming

– Dell Inc., the computer maker planning to go private in a $24.4 billion deal, reported fiscal fourth-quarter sales and profit that topped analysts’ estimates, a sign of buoyant demand for servers and software.

Revenue for the period ended in January fell 11 percent to $14.3 billion, yet exceeded the $14.1 billion average estimate of analysts, according to data compiled by Bloomberg.

The results suggest Chief Executive Officer Michael Dell made some headway in his campaign to transform the company into a provider of a broad range of business-technology products.

Dell’s earlier struggle to gain share in mobile devices and its late entrance into cloud computing contributed to a 31 percent decline in its stock in 2012, prompting Dell to seek a buyout.

Investors are more focused on the deal than quarterly results, said Shaw Wu, an analyst at Sterne Agee & Leach.

“That seems to be more important than the quarter itself in determining the near-term stock direction,” Wu said. “The results won’t matter as much.”

Michael Dell and Silver Lake Management are taking Dell private in the largest leveraged buyout since the financial crisis, offering $13.65 a share.

Some outside stockholders want the buyers to offer a higher price.

Shares of Dell rose in late trading after slipping by less than 1 percent to $13.81 at the close in New York. Dell has risen 27 percent since Jan. 11, the last trading day before Bloomberg News reported the company was in talks to go private.

Fourth-quarter net income declined 31 percent to $530 million, compared with analysts’ $551 million estimate.

Dell, the third-largest PC maker, is suffering from declining demand for desktops and laptops, which make up about half of its sales.

Global PC shipments fell 4.9 percent in the fourth quarter of 2012, according to market researcher Gartner Inc., and Dell’s shipments fell 21 percent.

The company hasn’t capitalized on consumers’ and businesses’ shift toward smartphones and tablets. And in data-center products and services – where Dell has acquired 18 companies for $12.7 billion since 2009 – it faces competition from IBM, Cisco Systems Inc. and Oracle Corp.

Dell’s sales for fiscal 2014, which began in February, may fall 1.3 percent to $56 billion, according to analysts’ estimates.

Michael Dell and private-equity firm Silver Lake seek to take Dell private after the company lost almost one-third of its value in 2012 amid stiffening competition in mobile and cloud computing.

The buyers need approval by a majority of shareholders, excluding Michael Dell, and face opposition from the company’s two largest outside shareholders.

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