here's dow jones take on dell earnings:
15:32 DJS Dell Computer's Earnings Soared 71%, Topping 'Whisper' Estimates
5:32 DJS Dell Computer's Earnings Soared 71%, Topping 'Whisper' Estimates
NEW YORK -(Dow Jones)- Mail-order personal computer giant Dell Computer
Corp. late Monday said its fiscal third-quarter earnings surged 71% as sales
climbed 58%. The results were better than analysts generally predicted and a
bit better than the so-called "whisper estimates" of optimists.
Dell said demand for personal computers remains "very strong" because
of lower prices and improved memory chips.
Austin, Texas-based Dell said its net income jumped to $248 million or
69 cents a share, from $145 million or 38 cents a share a year earlier. The
mean estimate of 34 analysts surveyed by First Call was for earnings of around
65 cents per share.
Analysts polled by Dow Jones expected Dell (DELL) to beat the official
estimate by around two cents a share. Although the "whisper," or unofficial,
number has moved higher, the First Call estimate has held steady since Dell
reported its fiscal second quarter in late August.
Dell's sales in the quarter climbed to $3.19 billion from $2.02 billion
a year earlier.
Many analysts expected Dell to post strong fiscal third-quarter
earnings, but not the kind of blow-out results the company had reported the
previous four quarters.
One market watcher was expecting net of 68 cents or 69 cents a share
because of the potential for stronger than expected sales of server computer
products - the fastest growing part of Dell's business - as well as continued
strength in Dell's traditional desktop computers for businesses.
Others cited an increasingly competitive market and the difficultyings growth because of its size. Dell's revenue
is expected to approach $12 billion in fiscal 1998.
The earnings were reported after regular stock-market trading ended
Monday. Dell shares (DELL) eb"
nded down $3.625, or 4.4%, at $79.75.
Last month, market research firm Dataquest Inc. said Compaq Computer
Corp., Dell and Hewlett-Packard Co., ranked Nos. 1,2 and 3 respectively, all
gained significant PC market share in the third quarter. Dell, which
specializes in direct sales, moved from third to second place in the U.S. in
the third quarter, had a 10.3% market share as shipments soared 74.3%.
Dataquest said Compaq and Dell don't seem to be stealing market share
from each other. But both firms are said to have stolen share from Gateway
2000 Inc., another direct-sales concern. Dell and Compaq, which have long
concentrated on the corporate market, are now starting to tread on Gateway's
turf, which is more consumer-oriented.
Dell and Gateway have outpaced the overall PC market in sales growth by
selling computers directly over the telephone or the Internet.
Dell announced in September that it will begin to increase its focus on
the consumer market, becoming the first PC company to offer leases to
home-computer customers.
On the other end, Dell last month unveiled its most-expensive products
ever, so-called "cluster servers," or groups of existing advanced computers
that are modified to share and back up tasks. Such systems represent a broader
move by PC manufacturers like Dell into advanced computing environments, where
preventing power failures and system shutdowns are principal concerns of
buyers.
Dell is growing fast in part because PC owners like being able to order
exactly what they want in their next machine. The traditional PC companies are
so fearful of the direct-sales threat that Compaq tried and failed twice
earlier this year to acquire Gateway.
Dell executives have said they expect the company to continue to grow
faster than the entire industry, and that they are working to make the company
more efficient.
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All Rights Reserved.
11/24 3:32p CSTEOF |
