Yes:04-04-01 07:05:53 PM UPDATE 1-Dell stands by first quarter targets, mum on year
tscquote.thestreet.com
(adds details, analyst, stock, changes dateline)
By Peter Henderson
SAN FRANCISCO, April 4 (Reuters) - Dell Computer Corp.
(DELL.O) said on Wednesday it was maintaining its six-week-old
forecast for its first fiscal quarter but would not comment on
the remainder of the year due to economic and industry
uncertainty.
Dell said in a statement ahead of an analyst meeting in New
York on Thursday that its low operating costs and its business
model -- direct sales -- gave it a competitive edge despite the
overall slowdown in the computer sector.
The company reaffirmed quarterly targets of about $8
billion in revenue and 17 cents in per-share earnings, which is
in line with Wall Street expectations for the period which ends
in about a month.
Dell had made the same forecast when it announced job cuts
and fourth-quarter results on Feb. 15, although previous to
that analysts had expected earnings of 19 cents on revenue of
$8.45 billion.
ABN Amro analyst Bill Shope said that Dell was keeping to
its target thanks to a conservative forecast in February and
the benefits of selling direct, which allowed it to price
aggressively even in a soft market.
"(Dell) stands out quite a bit. The other guys are
experiencing loss of market share and significant declines in
profits whereas Dell is gaining market share and sacrificing a
smaller amount of profits. It is the direct model. It is
starting to differentiate Dell once again," he said.
Dell shares rose to $23-9/16 in Instinet after hours trade
from a close on Nasdaq, before the announcement, of $22-3/16.
Dell stock has underperformed the American Stock Exchange
Technology Hardware index by almost 15 percent and rival Compaq
Computer Corp. (CPQ.N) by about 25 percent since the end of
1999.
Dell, which lowered forecasts five times in the past year,
cautioned that the market was still unpredictable although it
expected to gain share.
"Current softness in industry demand and profit margins is
not a secret," Chairman and Chief Executive Michael Dell said
in a statement. "But in this environment, the differences
between Dell and other major companies are compelling."
The statement added: "The company believes it is profitably
gaining market share and can outperform the overall
computer-systems industry in the period."
It also expected solid expansion in international markets
and said the Thursday conference would focus in part on higher
end storage units and servers.
Dell is one of the main personal computer makers
aggressively expanding into higher value computers for major
corporations. |
