Founder returns as CEO of Dell

DALLAS -- Dell Inc., battered by battery recalls and disappointing earnings, said yesterday that chairman Michael Dell will return to run the company he built into one of the world's largest makers of personal computers.

Dell's appointment is effective immediately. He replaces chief executive Kevin Rollins, who also resigned as a board member.

Dell shares, which fell 7 cents to $24.22 on the Nasdaq, jumped 98 cents, or 4 percent, in aftermarket activity.

During Rollins' tenure, Dell was battered by a recall of 4.1 million potentially flammable notebook batteries made by Sony Corp. and by disappointing earnings. The company yesterday forecast fourth-quarter profit and sales below analysts' estimates of 32 cents per share on sales of $15.3 billion.

The company's accounting practices also are under scrutiny. The US attorney for the Southern District of New York has subpoenaed documents related to Dell's financial reporting from 2002 on.

Dell has served as chairman since founding the company in 1984 and was chief executive until 2004, when he picked Rollins as his successor. Dell defended the beleaguered executive in September, saying Rollins wasn't solely responsible for recent missteps.

Rollins joined Dell in 1996 and had a variety of roles before becoming CEO, including chief operating officer, vice chairman, and president of Dell Americas. Before Dell, he was vice president and partner of Bain & Co.

Dell's model, which allows business and consumers to buy equipment directly from Dell, turned the company into a leading computer manufacturer and a Wall Street juggernaut. But in recent years Dell has been stung by a glut of low-cost, low-profit PCs and weaker-than-anticipated sales of pricier, more lucrative desktops and notebooks.

Last year, Dell lost its number one position to Hewlett-Packard Co.