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

To: OLDTRADER who wrote (170615)	8/16/2002 5:25:21 AM
From: calgal	Respond to of 176387

Sunny Dell sees a profit By John G. Spooner Staff Writer, CNET News.com August 15, 2002, 4:34 PM PT update Dell Computer slightly improved upon revenue expectations for its second quarter and predicted better things to come. The computer maker announced after market close on Thursday that it recorded a profit of $501 million, or 19 cents per share, on revenue of $8.46 billion for its second fiscal quarter, which ended Aug. 2. During the same period a year ago, Dell posted a loss of 4 cents per share including charges. Analysts polled by First Call expected the company to post a profit of 19 cents per share on quarterly revenue of $8.28 billion. Although most major PC manufacturers are losing money and are seeing a decline in market shares, Dell is expanding, the company said in a statement, predicting that the growth will continue. PC shipments for the industry as a whole will likely be the same or up slightly from the second quarter to the third--a usual seasonal phenomenon, executives said. Dell's shipments, however, could increase by 5 percent or more sequentially. As a result, the PC maker said it expects to record profit of 20 to 21 cents on revenue of $8.9 billion for its third quarter. The financial results, to some degree, were anticlimactic. The company announced on July 11 that it expected to post a profit of 19 cents per share for the quarter on revenue of $8.3 billion, up from an earlier estimate of 18 cents per share on revenue of about $8.2 billion. The unexpected increase in revenue to $8.46 billion stemmed from higher unit sales, especially to corporate customers, Dell said. Dell's total unit shipments for the quarter were up 5 percent from the first quarter and 18 percent year over year, the company said, while the average selling price of a Dell computer held steady at around $1,770. The company increased its server shipments by 18 percent year over year, it reported, while workstations were up 24 percent, and notebook shipments grew by 17 percent. Overall, Dell executives said they are optimistic about the company's progress in market-share growth and its cost-cutting strategies. Increasing unit sales while reducing costs will allow the computer maker to continue to be profitable in future quarters, they said. So far, the company is ahead of schedule on its initiative to cut $1 billion in costs, thanks to a drop in manufacturing and warranty costs, executives said. Dell has been able to trim down the per-box cost of manufacturing computers in its U.S. factories by 18 percent more than it originally expected, said Kevin Rollins, Dell's president and chief operating officer. The PC maker re-invests some of those savings in offering lower prices on products, but the rest goes to enhance its profitability. Dell is also cautiously eyeing a PC market recovery in some areas, but so far the company hasn't seen an increase in activity from large corporations. Consumers, small businesses and government customers have made up most of its recently. "We're really pretty hopeful and feeling pretty good about the consumer business...going into the Q3 (third-quarter) back-to-school season," said Michael Dell, the company chairman and CEO. "We've seen some bright spots, but they have been in pockets," he added. "We haven't seen an overall uptick across the board." Meanwhile, Dell's component costs have held steady or declined for the company. "The DRAM (dynamic RAM) market has been more rational and there's definitely some softening going on in the LCD market" prices, Dell said. Lower LCD (liquid-crystal display) panel prices help Dell keep prices down for its flat-panel displays and reduce its cost for manufacturing notebooks. At the close of regular trading, Dell shares were down one cent to $27.14. The earnings report was issued after the close of regular trading. news.com.com