Dell actually gives CREDIT to rivals that have been beating up on the company by 'streamlining' their businesses?? What on earth is the world coming to??? OLDTRADER and Kemble told me that HPQ was going 'bankrupt'. I'm very confused <ggg>.
Regards,
John
PS - Remember when Mikey Dell said Apple should just 'close up shop' and gives shareholders their 'money back' a few years ago? Sounds like he might have been talking about the WRONG company <ggg>... Besides, if they keep cutting prices and 'dis-improving' their India based consumer service operation, they will just end up creating more pissed off customers!!
AUSTIN, Texas -(Dow Jones)- Dell Inc. (DELL) (DELL (DELL)) executives gave grudging credit to some of the company's rivals Thursday for "eliminating inefficiencies" in their business models, saying the competitive environment has intensified more than Dell (DELL) initially recognized.
Still, Dell Chief Executive Kevin Rollins and others voiced confidence that Dell (DELL) can reignite its flagging growth rate.
They announced a plan to cut prices on some products, as well as invest more in the company's business and reduce costs through productivity improvements.
Chief Financial Officer Jim Schneider, speaking with analysts on a post- earnings conference call, said Dell (DELL) doesn't plan to start a "price war," but he said it will be more aggressive in cutting prices.
"We're trying to be selective, but yet across the board do a bit more" to reduce prices, Schneider said.
Meanwhile, Rollins said Thursday that results for Dell's (DELL) fiscal second quarter should be similar to its first quarter, although he declined to provide details.
The second quarter is "in a transition mode (and) should look somewhat similar" to the first quarter, he said.
Dell (DELL) announced Thursday that it no longer will provide quarterly guidance, saying it prefers the focus to be on long-term benchmarks. Rollins said the company will provide details on its long-term targets during its September analyst meeting in New York.
Earlier Thursday, Dell (DELL) reported fiscal first-quarter net income of $762 million, or 33 cents a share, compared with $934 million, or 37 cents a share, a year earlier. Revenue climbed 6% to $14.2 billion from $13.39 billion a year ago.
The results were in line with Dell's (DELL) profit warning last week, when it said aggressive pricing actions in the second half of the quarter would cut into results. Prior to the warning, Dell (DELL) had been targeting revenue of $14.2 billion to $14.6 billion, and earnings of 36 cents to 38 cents a share.
Dell's (DELL) growth rate has been slowing steadily over the last several quarters. In the year-ago first quarter, for instance, Dell (DELL) logged revenue growth of 16%.
Meanwhile, the fortunes of rival Hewlett-Packard Co. (HPQ) (HPQ) have been on the upswing. Hewlett-Packard (HPQ) announced quarterly results earlier this week that exceeded Wall Street expectations, and it also provided guidance for its coming quarter above the consensus view.
Regardless, Dell (DELL) executives touted a number of business segments Thursday where the company logged particularly strong first-quarter growth. Among others, they noted that revenue from the company's enhanced services division climbed 28% to $1.4 billion, while revenue from storage sales were up 12% at $500 million.
Still, overall revenue from desktop PCs - which constitute the biggest chunk of Dell's (DELL) quarterly sales - was down 3% from the year-earlier period at $5.1 billion.
Dell (DELL) reported that its first-quarter gross margin came in at 17.4%, compared with 18.6% in the year-earlier period.
Its average unit selling price came in at $1,430 for the first quarter, compared with $1,490 in the fourth quarter and $1,520 in the year-earlier first quarter.
Dell (DELL) shares climbed 2.5%, or 60 cents, to $24.55 in late trading Thursday. The stock closed Thursday's regular session up about 1.4%, or 32 cents a share, at $ 23.95. |
