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

To: Sig who wrote (35454)	3/25/1998 4:33:00 AM
From: Jerry Miller	Read Replies (3) \| Respond to of 176387

Dell sees more growth, no price war impact March 25, 1998 02:17 AM By Kevin Morrison SYDNEY, March 25 (Reuters) - Personal computer maker Dell Computer Corp said on Wednesday it has been unaffected by a PC price war in the United States and expects its strong sales growth to continue through 1998. Dell vice-chairman Mort Topfer also said the group's growth rate justified its high price to earnings multiples and that it was still recording strong sales in Asia, despite the currency turmoil in some Asian countries. A string of Wall Street analysts recently cut their rating on Dell after an earnings warning by competitor Compaq Computer Corp CPQ . Dell shares have quadrupled over the past year, making it one of the biggest outperformers among listed PC makers. "It is a valuation issue...but we believe if we continue to perform the way that we have been performing then that multiple is very reasonable," Topfer told Reuters before giving a press conference in Sydney during a short visit to Australia. "We continue to see strong momentum, nothing has really changed from our fourth quarter outlook," Topfer said. Dell last month reported an increase in sales to US$12.3 billion in the year to February 1, 1998, compared with $7.8 billion a year earlier. Topfer said analysts were forecasting Dell's sales to reach US$17.5 billion in the year to end-January 1999. "We don't like to forecast the future, but we see that we have an ability to grow at two to three times the market growth," Topfer said. "We expect to achieve sequential growth, which on a year to year basis, will probably be in the 40 to 50 percent range." Share prices in PC makers fell earlier this month as demand for sub-US$1,000 machines increased sharply and Wall Street braced itself for a PC price war. However, Topfer said Dell's direct marketing approach, which meant orders were built to specification cut down on the level of its inventories compared with its competitors. "There is a lot of inventory in the channel and we don't play in the channel, and we don't see it having too much affect or any impact at all," Topfer said. Dell's approach contrasts with its major competitor Compaq Computers Computer Corp CPQ , which has a network of stores to sell its products. Topfer, who is one of three members of the office of CEO at Dell along with founder Michael Dell, said the merger between Compaq and Digital Equipment Corp DEC was unlikely to affect Dell's growth prospects. He said a profit warning by semiconductor giant Intel Corp INTC was related to inventory problems experienced by Compaq, and did not reflect the current PC market, which was still very strong. Dell's sales in the Asia-Pacific were six percent of group revenue. Dell's president Asia Pacific Phil Kelly said Dell has been operating in the region since 1993, and hoped it would make up 25 percent of global revenue within five years. Asian region sales in the fourth quarter to February 1, 1998, grew 79 percent to $240 million, despite the currency turmoil in South Korea, Dell's second largest market in Asia. Kelly said much of the growth was coming from China, which he expected to become Dell's second major market in the region behind Japan. Dell last month announced plans for a China customer centre in Xiamen in the Fujian province to cater for the expected surge in Chinese demand for PCs. ((Sydney newsroom, 61-2 9373-1800 fax 61-2 9262-4727, sydney.newsroom@reuters.com)) REUTERS