UPDATE 3-Dell profit plummets 31 pct as investors ponder $24 bln buyout
* Dell Q4 revenue down 11 pct but beats estimates slightly
* Declines to give forecast due to pending buyout offer
* Founder and CEO Dell skips conference call
SAN FRANCISCO, Feb 19 (Reuters) - Dell Inc on Tuesday reported a 31 percent drop in profit, hurt by a shrinking consumer business, as investors weighed founder Michael Dell's offer to buy out the world's No.3 maker of personal computers.
Michael Dell, teaming up with private equity firm Silver Lake and software maker Microsoft, is offering $13.65 a share to buy out the company, but at least four of its largest investors are opposed to the $24.4 billion deal.
The founder and CEO did not join in management discussion of the results in a conference call with analysts, given his participation in the buyout. Dell executives also did not comment on the buyout.
Analysts said Dell's rapidly shrinking business and murky prospects in a declining PC market may make the buyout a more attractive option for investors tired of waiting for a turnaround.
Since news of the proposed buyout emerged in January, the stock has gained almost 30 percent - a rally that analysts say may evaporate should the deal fall through.
On Tuesday, the company said sales across every business line, except servers and networking, declined in the fiscal fourth quarter. Revenue from servers and networking climbed 18 percent, driven by its datacenter business and revenue from recently acquired companies such as Quest Software and Sonic Wall.
Overall, however, revenue slid 11 percent.
"There isn't anything really to be super excited about," Brian Marshall, analyst with ISI Group, said, adding that declining revenue and profit doesn't bode well for the company.
"The (buyout) deal makes sense. It will go through," he said. "They will probably have to pay a little more than $13.65 to get it done but at the end of the day there aren't a lot of options out there."
The company gave no financial forecast for fiscal 2014 or the fiscal first quarter, citing the proposed buyout.
The company reiterated that it plans to file a proxy statement with the U.S. securities regulators on the merger agreement but made no other reference to the buyout in its earnings release.
Shareholders representing almost 14 percent of Dell shares not held by Michael Dell have now said they will vote against the deal. The billionaire, who created the computer maker from his college dorm room in 1984, holds a roughly 16 percent stake and needs a majority of shareholders - excluding him - to vote for the deal.
Some are holding out hope for a higher offer. Peter Misek, analyst with Jefferies, said a bumped-up offer of about $15 per share was a "fair price."
"The better-than-expected results means that's the fair thing to do, in our opinion, is to raise the bid to a price where current shareholders reap some of the rewards while the take-private consortium enjoys the prospect of a respectable return," Misek said.
SLIDING PC SALES
Dell posted net income of $530 million, or 30 cents a share, in its fiscal fourth quarter on revenue of $14.3 billion. That came in slightly higher than the average analyst estimate of revenue of $14.12 billion, according to Thomson Reuters I/B/E/S.
Excluding certain items, it earned 40 cents a share, compared to an average forecast for 39 cents.
Shares of the company edged 0.5 percent higher in after-hours trade to $13.87, from a close of $13.805 on the Nasdaq.
Dell has said it plans to stick to its current turnaround strategy to diversify away from personal computers following the buyout.
The company, once regarded as a model of innovation in the early 2000s for pioneering online ordering of custom-configured PCs, missed the big industry shift to tablet computers, smartphones and high-powered consumer electronics such as music players.
It is also had to defend its market share against hard-charging Asian rivals like Lenovo.
Dell has lost 40 percent of its value since last year's peak and is trying to reinvent itself as a seller of services to corporations - an internal overhaul that some analysts say may be better conducted away from public scrutiny.
The company, was also hurt by the slide in holiday-season sales of personal computers for the first time in more than five years despite the launch of Microsoft Corp's new Windows 8 operating system.
Dell's worldwide PC shipments fell nearly 21 percent to 9.48 million in the last three months of 2012 from 11.97 million in the same period a year ago, according to IDC.
The bright spot for Dell was its growing sales of its enterprise solutions and services revenue, which rose 6 percent to $5.2 billion, and accounted for 34 percent of revenue for fiscal year.
In contrast, consumer revenue plummeted 24 percent to $2.8 billion, underscoring the plight of the broader PC market while sales to large corporations declined 7 percent to $4.7 billion in the quarter.
Dell said it was seeing growth in tablets and low-end desktops and notebooks. It ended fiscal 2013 with $15.3 billion in cash and investments.