New laptops next week, wonder If any will be DVD....
Dell 's Growth Seen Outpacing Industry Rate
By Evan Ramstad
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09/05/97
The Wall Street Journal
(Copyright (c) 1997, Dow Jones & Company, Inc.)
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AUSTIN, Texas -- Dell Computer Corp. executives told Wall Street analysts that they expect the company to continue growing faster than the personal computer industry as a whole and said they are taking steps to make the company more efficient.
The executives apparently were hoping to assure investors that the direct seller of computers can still improve even though it has grown at a rate four times faster than the industry -- and its stock price has tripled since December.
For the second quarter ended Aug. 3, the company said profit doubled to $214 million, or 59 cents a share, on a 66% jump in revenue to $2.81 billion.
Chief Executive Officer Michael Dell forecast that the PC industry will grow at an average annual rate of 16% over the next five years and said the company believes it will grow faster.
Chief Financial Officer Tom Meredith said the company can make further improvements in inventory and cash management. Dell has led the industry in cutting inventory to low levels in order to adopt new components and pricing quickly. "There is more opportunity in [cutting] receivables than inventory, but there is still some in inventory," Mr. Meredith said. "We still have some parts sitting for days and that's not good."
Analysts said the main challenge for Dell , based in nearby Round Rock, Texas, is to avoid simple mistakes while growing so quickly. "The issue for them is execution. There's not a question about strategy here," said Andrew Neff, analyst at Bear Stearns & Co.
Separately, Dell next week will introduce a new family of notebook computers, aiming to differentiate corporate systems from those for consumers and small businesses. The action is similar to one taken by Dell in its desktop computer products in 1995.
The new brand line, to be called Inspiron, will be aimed at consumers and others who purchase notebooks in small quantities. Dell 's existing notebook line, called Latitude, will be marketed to corporate buyers. A formal announcement, with specifications and prices of the new products, will be made next week. |
