Dell Announces Anticipated Q4 Expense Toward $3 Billion in Cost Reductions by End of Fiscal 2011 Dell Announces Anticipated Q4 Expense Toward $3 Billion in Cost Reductions by End of Fiscal 2011
Company also accelerates vesting of ‘out-of-the-money’ stock options.
Round Rock, Texas.-Dell said the company’s fiscal fourth-quarter 2009 results will include expenses related to continued improvement in its competitive position, part of $3 billion in planned cost reductions by the end of fiscal 2011.
The company expects to recognize an estimated pretax expense of $135 million to further optimize Dell’s global manufacturing and distribution network and to reduce the size of its workforce. Included in the expense is a previously announced migration of production of computer systems for customers in Europe, the Middle East and Africa to another Dell operation and to contract manufacturing partners by the start of fiscal 2011.
Separately, Dell will incur a pretax, noncash expense of an estimated $145 million related to stock-based compensation, including $106 million for accelerated vesting of previously awarded options. The acceleration, effective Jan. 23, covers 20.9 million shares with a weighted-average exercise price of $22.03. The action means Dell will recognize all expenses associated with these options in Q4, rather than over time. The remaining stock expense is for the annual true-up of full-year, stock-based compensation forfeitures.
Together the cost-reduction and stock-based compensation expenses will total about $280 million pretax, or 11 cents per share. The company will announce its Q4 and full fiscal-year 2009 financial results on Feb. 26.
Dell’s plan to reduce costs by $3 billion was first announced in March 2008. The company said it will take additional cost-reduction steps during its fiscal 2010, which begins Jan. 31.
This news content was configured by WebWire editorial staff. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.