Reuters
INTERVIEW-Dell CFO sees small decline in Q4 average prices
Monday November 18, 10:27 pm ET
By Duncan Martell
URL:http://biz.yahoo.com/rc/021118/tech_dell_1.html
SAN FRANCISCO, Nov 18 (Reuters) - Dell Computer Corp. (NasdaqNM:DELL - News) expects the average selling price for its computers, servers and laptops to decline by 3 percent to 5 percent in the fourth quarter from the third, due to a higher proportion of consumer sales, the company's chief financial officer said on Monday.
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"In the fourth quarter where we have a bigger mix of our business in the consumer segment, you'd expect average selling prices to come down somewhat," said Jim Schneider, chief financial officer of Dell, in an interview. "It'll (average selling price) be down a few percentage points again."
Prices for consumer PCs and laptops are lower than for powerful computer-servers or high-end workstations.
Asked if they would decline 3 percent to 5 percent, Schneider said: "Somewhere in that kind of range. It depends, again, on how strong the consumer quarter is for us."
Last week Round Rock, Texas-based Dell reported third-quarter profits that rose 31 percent as the company gained market share, and posted record revenue and units sold. Dell said that cost reductions, lower component costs -- such as cheaper computer chips -- and an improved mix of products and services contributed to its higher profits.
Schneider said Dell would continue to cut operating expenses, which were 9.9 percent of revenue in the third quarter. He's aiming to push that figure even lower.
"We're now at 9.9 and we believe we can get that down lower," Schneider said. "I don't know how much lower, but more into the 9's (as a percentage of revenue) than 9.9."
While the company continues to cut operating expenses, job cuts are not in the offing, Schneider said. "We actually added about 2,000 people in the last quarter, sequentially," Schneider said. Dell's last job cuts were in May 2001.
Global PC sales fell last year worldwide for the first time in more than 10 years and while Dell wasn't spared, it suffered far less than rivals such as Hewlett-Packard Co. and Gateway Inc, whose PC businesses were driven into the red.
Schneider also said Dell will make money on its handheld PocketPC digital organizer, dubbed "Axim X5," which comes in different designs and cost $200 and $300, after discounts.
"Dell doesn't sell anything we can't make a profit on," Schneider said.
Last week, Dell said it expects fourth-quarter earnings of 23 cents a share, with revenue up 20 percent at $9.7 billion. |
