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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: kemble s. matter who wrote (157094)	5/12/2000 10:37:00 PM
From: calgal	Read Replies (2) \| Respond to of 176387

Dell regains its stride with strong quarter Hi Kemble! Here is today's news from Austin360. :)Leigh "Dell also benefited from timing. Most computer makers struggled hard during the first quarter and saw corporate sales return to normal in February and March. Dell, which uses a fiscal calendar that puts its first quarter between the end of January and April, caught more of the rebound in the period." austin360.com By John Pletz American-Statesman Staff Posted: May 12, 2000 After two quarters of missing Wall Street's expectations, Dell Computer Corp. returned to its old form during the first quarter, posting higher-than-expected earnings. Dell got over the Y2K hangover and saw strong growth in sales of more-profitable servers and notebook computers during the quarter ended April 28, the company reported Thursday. Costs of parts, such as chips, also were lower than expected. Revenue climbed 31.5 percent to $7.3 billion from $5.5 billion a year ago, and net income climbed 21 percent to $525 million from $434 million. Dell's stock -- which has been battered along with the rest of the tech sector in recent weeks -- fell 25 cents to $44.69 a share during regular-session trading before results were released. The stock rebounded in after-hours trading, climbing as high as $48.13 before settling back to close at $47.69. Some of the Round Rock-based company's net income gains were driven mainly by strong returns in its investments. Operating income -- the company's profits from its core business -- was relatively flat at $625 million, compared with $600 million in the year-ago quarter. Earnings per share were 19 cents, compared with 16 cents in the same period a year ago. Analysts surveyed by First Call/Thomson Financial said they had been expecting the company to earn 16 cents per share. Earnings per share got a 2-cent boost from gains Dell made on investments in young companies preparing to go public. The company, the No. 1 PC seller in the United States and No. 2 worldwide behind Compaq Computer Corp., has been trying to sell more profitable products, such as servers and notebook computers. "That's still the group, in our view, to watch, along with portables," said Amir Ahari, an analyst with U.S. Bancorp Piper Jaffray. "The high-margin business is helping them go through the (first-quarter) crunch." The desktop computer business, where profit margins have declined steadily, accounted for 52 percent of Dell's total sales in the quarter, down from 61 percent a year ago. Sales of enterprise products -- servers, storage units and high-end workstations -- rose 52 percent and now account for 18 percent of Dell's revenue. Notebook sales rose 67 percent and account for 30 percent of revenue. Dell also benefited from timing. Most computer makers struggled hard during the first quarter and saw corporate sales return to normal in February and March. Dell, which uses a fiscal calendar that puts its first quarter between the end of January and April, caught more of the rebound in the period. "The big growth engines are in the entertainment and notebook areas as well as home and small business," said Vice Chairman Kevin Rollins. "Our home and small-business sales globally were up 62 percent from a year ago." That sector was a key factor in helping Dell's struggling European business. Sales in Europe rose 17 percent, which is better than the disappointing 8 percent growth in the fourth quarter but still below the traditional 22 percent range. Dell said Internet-related sales, a key focus for the company, showed strong progress, too. Sales to dot-com companies and providers of Internet service and applications have grown more than 250 percent in the past six months. Wall Street also is waiting to see how Dell's new storage products from last fall's acquisition of ConvergeNet will fare. Dell originally hoped to release a product in the summer, but the company said earlier it won't happen until fall. "We want to see if it is going to be released on track," Ahari said. "If they delay it much longer, they're going to lose velocity to the competition."