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Dell concerns compounded by accounting mess

Dell on Monday said it will delay filing its second quarter fiscal report due to an ongoing informal investigation by the Securities and Exchange Commission over previously disclosed accounting irregularities.

The world's largest computer maker also said it will suspend its share repurchase program until further notice, compounding existing investor concerns over the company's fundamentals and forward looking prospects.

"Investigations have indicated the possibility of misstatements in prior financials, but Dell hasn't determined the materiality," UBS analyst Ben Reitzes told his clients on Monday. "We believe the delay adds another layer of concern to the Dell story."

According to Reitzes, Dell also postponed its analyst day for the second time this year. However, he said the meeting, which had been scheduled for Wednesday, was unlikely to have revealed any new turnaround plans. Instead, Reitzes believes it will take some time before Dell can effectively implement changes that would yield material improvements.

"With the market being driven by overseas, consumer and notebooks (areas where Dell is not advantaged), we do not see any turnaround near-term," he wrote in a research note. "We believe Buy-rated competitors such as HP, Apple and Sun are better positioned to take advantage of dynamics and deliver improving fundamentals over the next year."

The Round Rock, Texas-based Dell said it plans to file its second quarter report "as soon as possible."