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

To: kemble s. matter who wrote (169627)	5/16/2002 12:41:40 AM
From: calgal	Respond to of 176387

Dell: Focus on corporate customers By Chris Kraeuter, CBS.MarketWatch.com Last Update: 6:23 PM ET May 15, 2002 AUSTIN, Texas (CBS.MW) - Investors tuned to Dell's first-quarter financial report after the bell Thursday will be hoping for some signs of life from corporate customers. While consumers have been the holding up much of the economy throughout this downturn, businesses have scaled back budgets for information technology purchases as they have seen profits constricted by tumbling sales figures. With signs of improvements in the economy, investors are hoping companies might be buying again. Shares, though, haven't reflected this belief. Dell's stock (DELL: news, chart, profile) ended Wednesday at $27.57 - a two-month high -- but only a week ago shares fell to $22.33 - a seven-month low. Shares haven't closed above $30 for 13 months. Sam Olesky, founder of Olesky Capital Management in Mill Valley, Calif., said he'll be interested in signs of increased demand from corporate customers and he wants to hear about Dell deriving more of its revenue from products that aren't personal computers. Last quarter, 57 percent of Dell's sales came from desktops, but 18 percent came from enterprise sales, which represent servers, storage devices and switches. The other quarter of Dell's sales came from portables, like laptop computers. The numbers to watch Analysts surveyed by Thomson Financial/First Call expect earnings of 16 cents a share on revenue of $7.86 billion. During the same quarter last year, Dell earned $462 million, or 17 cents a share, on revenue of $8.03 billion. On May 3, Dell repeated its expectation that it would earn 16 cents a share. Also at that time, Dell said revenue might be around $7.9 billion, a decline of only 2 percent sequentially, instead of the originally targeted drop of 3 to 5 percent. Unit volumes are expected to decline 3 to 5 percent sequentially. The first quarter of the year is typically a weaker quarter compared with the holiday-spending influenced fourth quarter. During the fourth quarter, Dell earned $456 million, or 17 cents a share, on revenue of $8.1 billion. Another interesting number to watch for will be Dell's average selling price per unit for its boxes. Last quarter that number fell to $1,700 compared with $1,800 in the third quarter and $1,850 during the second quarter of last year. Smaller competitor Gateway (GTW: news, chart, profile) renewed a price war with larger box makers in a bid to regain market share. Dell, which commands about a quarter of the U.S. computer market and about 13 percent of the global market, said it gained share during the last quarter. Ahead of the results, analyst Don Young at UBS Warburg wrote that he expected in-line first-quarter results that will reflect "continued strength from the consumer and more stable component pricing. A secondary contributor is the stabilization of the corporate market." For the June quarter, he expects earnings of 17 cents a share and revenue of $8.1 billion with a modest increase in ASPs. On average, analysts expect second-quarter earnings of 17 cents a share and revenue of $8 billion. marketwatch.com