Devoted to Managers and those that seek to improve their management skills

While the news that over the short-term Dell (DELL) outperformed analysts' expectations was good, it may be the last good news for the company for a long time.

Overall revenue for the company's fiscal first-quarter increased to $14.6 billion, up from $14.2 billion from a year ago. Earnings per share came in at 33 cents. Analysts had expected revenue to come in at $13.9 billion with earnings at 26 cents a share.

Net income for the company fell to $759 million, or 34 cents a share, but all of that is subject to restatement because of the ongoing investigation into the accounting practices of the company over the last couple of years.

Some of the sales for the quarter were helped by the plunging prices of computer components such as flat-screen monitors, hard-disk drives and memory chips. That looks to change in the near future.

Even with the general good news of increased gross revenue, the news looks grim for the company. 
 
Dell says that its operating profit margins will be under more "pressure" in comparison to the first quarter as slower sales will ensue from the usual slow time of the year. They also see higher operating and investigative costs cutting into their margins.

The company also sees competitors more aggressively pricing their products, and component costs increasing in the next couple of quarters.

With these mounting pressures, the company has decided to cut 8,800 permanent jobs over the next year and 5,300 temporary jobs. Dell said the cuts would be across different functions, regions and customer segments.

The growing pressure from the main rival of the company Hewlett-Packard (HP) has been a factor in all of this as HP increases its market-share lead over the former No. 1 computer company.

Another change in strategy which shows the extreme pressure on Dell was its decision about 10 days ago to start selling computers through retail giant Wal-Mart (WMT). That's the one unknown factor in all of this that is impossible to measure with no history to project sells with.

But with Wal-Mart's reach, it could definitely give Dell a boost. Dell does have the potential to streamline to the type of specifications that Wal-Mart demands, and could draw some savings possibly out of the supply chain if they can sell enough units.
 
Either way you look at it, over the next few quarters, Dell is probably in a lot of trouble. If the Wal-Mart strategy doesn't work for them, what will?