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

To: stockman_scott who wrote (166539)	8/17/2001 6:17:13 PM
From: calgal	Read Replies (1) \| Respond to of 176387

Weak sales, margin thrash Dell shares Stock off 9 percent following report By Chris Kraeuter, CBS.MarketWatch.com Last Update: 5:46 PM ET Aug. 17, 2001 ROUND ROCK, Texas (CBS.MW) -- Dell Computer shares fell 9 percent Friday after the computer maker said an ongoing price war is eroding margins and weakening sales. FRONT PAGE NEWS U.S. averages slammed by warnings Ford shares fall after warning, restructuring Appeals court won't delay Microsoft hearing Gold futures soar to 12-week high Market news and more! Sign up to receive FREE email newsletters Get the latest news 24 hours a day from our 100-person news team. Dell said its third quarter sales will fall by up to 5 percent, and its third quarter earnings may be up to 2 cents below the current Wall Street target of 17 cents per share. Dell said an ongoing price war with competitors continued to erode its gross margin, but the company matched its lowered financial targets for the second quarter. Shares (DELL: news, chart, profile) fell $2.38 to $23, a level not seen since late June. CFO James Schneider said during a conference call Thursday that the demand environment remained soft during the just completed quarter and that Asia and Europe began to show signs of weakness. The company maintains that it gained market share as it lowered its prices amid stiff competition. Dell also said it has suffered lower revenue as it passed on component cost savings to customers. Dell sells computers direct to customers. For the second quarter ended Aug. 3, Dell reported a net loss of $101 million, or 4 cents a share. During the same quarter last year, net income was $603 million, or 22 cents a share. Net income from operations, excluding charges, was $433 million, or 16 cents a share, matching the per-share consensus expectation of analysts surveyed by Thomson Financial/First Call. Revenue was $7.6 billion compared with $7.67 billion during the same quarter last year. Analysts expected revenue of $7.71 billion, on average. During the previous quarter, net income was $462 million, or 17 cents a share, on revenue of $8 billion. Gross margin was 17.5 percent, down from 21.3 percent during the same quarter last year. During the previous quarter, gross margin was 18 percent. On July 19, Dell said it would hit its targets, but that it would also take a charge of $700 million for restructuring and investments. The actual amount of the charge was $742 million. In May, Dell lowered the market's expectation for earnings to a range of 15 cents to 17 cents a share from 18 cents. Chris Kraeuter is a reporter for CBS.MarketWatch.com in San Francisco marketwatch.com