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Dell sees demand on track, Windows 2000 heating up
NEW YORK, May 11 (Reuters) - Dell Computer Corp.'s (NasdaqNM:DELL - news) chief financial officer on Thursday said demand for its computer products remained healthy, and that he sees second quarter revenues growing 8 percent over the first quarter.
``Normal seasonal patterns appear intact,'' Chief Financial Officer James Schneider said in a conference call with analysts. He also suggested he was comfortable with growth forecasts of 8 percent for the July quarter compared with the April quarter.
He added that he sees operating margins as a percentage of revenues growing to about 10 percent by the fourth quarter, and at about 9 percent for the year as a whole. Dell reported operating profit margin of 8.6 percent in the first quarter.
Executives said that the company planned to carefully control costs in order to achieve the margin improvements, and implied that management was confident that it could manage effectively expected higher component costs later this year.
Dell, which has ploughed $800 million into roughly 90 firms in the data transfer, storage, and Web business and consumer markets, expects to see higher levels of investment gains at a rate of around $100 million per quarter, Schneider said.
Dell, the world's No. 2 personal computer maker, sounded a confident note on the transition the PC industry is making to Windows 2000, the latest generation of the dominant Microsoft Corp. (NasdaqNM:MSFT - news) operating system. Schneider said the move by its customers to Windows 2000 appeared to be on track, with momentum picking up in the course of this year.
His comments fit with similar remarks from other business PC makers such as Compaq Computer Corp. (NYSE:CPQ - news), International Business Machines Corp. (NYSE:IBM - news) and other PC makers. They have said they are not seeing any signs of the slowing growth that Microsoft recently warned would cut revenue growth to around 15 percent in the coming year, down from around 20 percent previously. |
