SAN FRANCISCO (Reuters) - Dell Inc DELL.O said on Tuesday it expects to resume share buybacks after reducing reported net income by a total of $92 million in restated financial results for periods from fiscal 2003 through the fiscal first quarter of 2007.
The cut in profit was less than Dell had said was possible, and its shares rose 1.8 percent in after-hours trade. The company filed overdue financial reports with the U.S. Securities and Exchange Commission on Tuesday and said it expected to be in compliance with Nasdaq listing requirements.
It plans to file third-quarter results at the end of November and then will resume the stock buybacks.
“The issue is that their financials are cleaned up, their SEC documents are filed and they are ready to go on with business,” said Kim Caughey, analyst and portfolio manager at Fort Pitt Capital Group, which manages about $1.2 billion, including Dell shares.
“Business includes share repurchases, and we’re very, very happy about that,” Caughey added.
The world’s second-largest computer maker had said in August that its restatements, following a yearlong internal audit of its accounting, could reduce net income for the restatement period by $50 million to $150 million.
The company had suspended its share repurchase program in September, 2006 pending the outcome of the accounting audit.
Until now, Dell had not filed financial reports with the U.S. Securities and Exchange Commission for the periods under review in the audit, which Dell’s board launched in 2006 after the SEC began reviewing the company’s accounting for possible misstatements, including accruals, reserves and other balance sheet items.
The reduction of $92 million, or 3 cents per share, compares with previously reported net income for the period of more than $12 billion, or $4.78 per share, Dell said in an e-mailed statement. The restatement represents less than 1 percent of the total net income during the period, spokesman David Frink said.
Dell shares rose to $30.35 in after-hours trading from a Nasdaq close of $29.80.
Dell said in August that its audit, involving 125 lawyers and 250 accountants, found that top executives sought accounting adjustments to reach quarterly performance goals. Some executives were dismissed or otherwise reprimanded following the audit, Dell said.
Company founder Michael Dell returned as chief executive in January, replacing Kevin Rollins after the company repeatedly missed analysts’ revenue expectations.
The company had said that executives, whom it did not name, transferred excess accruals from one liability account to another and used excess balances “to offset unrelated expenses in later periods.”
Dell said on Tuesday it would hold an analyst meeting on April 2 and April 3, 2008, at its headquarters in Round Rock, Texas, and scheduled its annual shareholder meeting for December 4 of this year.
Additional reporting by Peter Henderson
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