Hi Kemble! Do the Math! Can you keep up with all of the great Dell news? :)Leigh
marketwatch.newsalert.com
FOCUS-Dell CEO sees growth "coming back"
Reuters Company News - March 13, 2000 17:43
(Updates throughout)
FAIRFAX, Va., March 13 (Reuters) - Dell Computer Corp. Chairman and Chief Executive Michael Dell on Monday said the slowdown in computer purchasing and shortages of key components that sapped results in recent quarters have faded as issues.
In addition, Dell, founder of the world's fast-growing No. 2 personal computer maker, said his company was preparing to announce a new deal with Ariba Inc. , a leading supplier of business software that links major industrial companies to Internet-based networks of suppliers.
Dell and Ariba later said in a statement they entered into a broad alliance to use the Internet to connect small and medium sized businesses more efficiently.
Speaking to reporters at a news conference here, Dell said that "certainly the growth is coming back" in his company's business as the slowdown in corporate purchasing ahead of the Year 2000 and a shortage of key components wind down.
"Those don't appear to be issues right now," he said in response to a question by Reuters about what has motivated a wave of upgrades by nearly a half-dozen brokerages on Dell stock during the past week, sending shares to year-high levels.
Shares of Dell jumped nearly 7 percent to 54-3/4, up 3-1/2 on the day Monday, and nearly 20 percent since a string of financial analysts began turning more bullish on the stock last week.
Ariba shares traded as low as 287-1/2 on Monday recovered to close at 298, down 7-3/8.
More than 50 percent of Dell's revenues come from corporate PCs as opposed to consumer and small business PCs and non-PC sales such as software and Internet services.
However, when asked to comment on whether the company was on track to meet Wall Street's analysts estimates for the first fiscal quarter ending in April, he declined to comment, citing standard company practice.
The earnings consensus for the first fiscal quarter is 16 cents per share according to a survey of analysts by First Call/Thomson Financial, which compiles brokerage estimates.
For example, Banc of America Securities analyst Kurt King said on Monday he had upgraded Dell amid signs of a strengthening market for corporate computers, shifts in component pricing and availability that favour Dell and the company's exploding Internet opportunity.
Dell, despite continuing to grow at more than double the average rate of its major industry rivals, has struggled to rebound from slackening revenue growth over the past year, which has down-shifted to around 30 percent per year, down from better than 50 percent per year growth historically.
Earlier this year, Dell asked Wall Street to "reset" their expectations to the lower levels around 30 percent to avert the repeated earnings disappointments that have plagued Dell over the past year, which had led the once high-flying stock to trade sideways.
In response to a reporter's question about the computer maker's future strategy to bolster its presence in the Internet business market, Dell said his company would be announcing new ties to Ariba on Monday.
"We have an announcement coming fairly soon," he said, adding quickly, "later today."
Describing how the Internet was changing his company's relationship to his own corporate customers, Dell said that more than 40,000 business customers were now using custom-created Web pages.
By linking these pages to business software systems from companies such as Ariba, and rivals like SAP, Baan or PeopleSoft, customers only need to have their employees enter sales order information once from initial buying decision to purchase order to final order, manufacturing and delivery, Dell said. Copyright 2000 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
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