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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (37018)	5/18/2001 1:45:28 AM
From: Sully-	Respond to of 65232

Dell Profit Flat, Sales to Fall [[ Reuters ]] May 17 5:51pm ET By Nicole Volpe NEW YORK (Reuters) - Dell Computer Corp. on Thursday reported flat first-quarter earnings and said second-quarter sales would decline, as the No. 1 personal computer maker continued to lead the industry into a price war. The company, based in Round Rock, Texas, reported net income of $462 million, or 17 cents per share, compared with $466 million, or 17 cents a share, a year earlier, meeting the consensus of analysts polled by Thomson Financial/First Call. Sales rose 10 percent to $8 billion. "We delivered on the revenue and profit guidance we provided at the start of the quarter," said Michael Dell, the company's chairman and chief executive. Executives said that second-quarter earnings per share would be at best flat with the first quarter at 17 cents, and could go as low as 15 cents. They also said they see a sales decline of between 3 percent and 5 percent from the first quarter. Analysts were expecting a range of 16 cents to 20 cents for Dell's second quarter, which ends in July. The consensus was for 18 cents, according to Thomson Financial/First Call. Dell President and Chief Operating Officer Kevin Rollins said that aggressive pricing was continuing. "Price competition in the marketplace is very intense, but it's been that way since the fourth quarter, and the preferences of customers are clearer than ever," Rollins said. Despite falling prices, Dell's first-quarter gross margin of 18 percent was flat from the previous quarter, helped by growth in sales of more powerful business computers and notebook computers. "If things had been bad on the margin side they would have had to become less aggressive in the price war they are driving in the industry," said Meta Group analyst Steve Kleynhans. "They've laid off a bunch of people and consolidated operations. That says they may be able to continue this price war through the summer," he added. Executives declined to give an outlook for gross margins, as a percentage of revenue. But second quarter net operating margins would be flat, to slightly down, executives said. The announcement came after the Nasdaq close. Dell's shares traded at $24.94 in after-hours trading, down from $25.88 at the end of the regular trading session. The stock, which was the top performer of the S&P 500 in the 1990s, has underperformed that index by more than 40 percent since the beginning of 2000. It has underperformed other computer makers in the American Stock Exchange hardware index by less than 10 percent in the same time frame. siliconinvestor.com Ö¿Ö