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Technology Stocks : DELL Bear Thread -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (1643)	8/24/1998 12:03:00 PM
From: H James Morris	Respond to of 2578

Just Dell re-confirming they're bullet proof. <enang, Malaysia, Aug. 24 (Bloomberg) -- Dell Computer Corp., the world's No. 1 direct seller of personal computers, expects higher sales from China to offset any slowdown in the rest of Asia, said Vice-Chairman Morton Topfer. ''China sales will be additive'' to company's results in the first half, Topfer told reporters in a briefing after visiting Dell's Asia-Pacific sales and manufacturing center in Penang, northern Malaysia. Although, the Asian turmoil ''has lowered our expectations'' in terms of sales growth. Slowing economies across Asia have crimped consumer demand for goods such as computers. Still, the tumble in Asian currencies -- sparked by the devaluation of the Thai baht on July 2, 1997 -- also cut the cost of setting up factories in Asia for foreign companies. Last week, Dell, which builds computers to order, started direct-sales in China. The company has four factories around the world, with the latest opening in Xiamen, China. Dell's top executives were visiting Penang after opening the China direct sales operation last week. Sales in Asia in the second quarter ended Aug. 2, or before Dell began direct sales in China, rose 34 percent to $280 million from a year ago. On Aug. 19, Round Rock, Texas-based Dell said earnings for the second quarter soared 62 percent to $346 million, or 50 cents a diluted share, from $214 million, or 29 cents, a year earlier. The earnings were above analysts' expectations. Asia Asian sales accounted for 6.5 percent of the company's second-quarter sales of $4.33 billion. Before the earnings report, many analysts had been concerned that falling PC prices might slow Dell's profit growth. Last week, Dell's Vice-Chairman Kevin Rollins said sales in China were expected to grow at double the annual 20 to 30 percent rate forecast by the industry. China is one of the few countries in Asia that is still expecting economic growth. Others -- including Thailand and Indonesia -- are in recessions after currency devaluations sent interest rates soaring and pushed many businesses into bankruptcy. While disk-drive maker Seagate Technology Inc. has fired workers and disk-drive part maker Read Rite Corp. closed its Malaysian plant to cut costs as excess supply pushed down prices, Dell continued to expand. In the second quarter, Dell hired 2,900 new employees, increasing its total employees to 20,800 worldwide. Malaysia and its neighbors are banking on companies such as Dell to increase their investments in Asia, providing jobs to thousands and paying taxes, to help these countries pull themselves out of the economic slump. Malaysia's economy is about to slide into its first recession in 13 years after growth of more than 8 percent a year in the past decade. Dell has managed to expand, keeping costs low, because it holds little in inventory compared with its competitors such as Compaq Computer Corp. and Hewlett-Packard Co. As prices of parts, including disk drives, fall, Dell has been able to buy the cheaper parts faster because it has less goods in storage. Dell has eight days of inventory at hand. ''It takes time'' for the other computer-makers to clear their inventory, said Rollins. ''Inventory means higher costs.'' Dell shares rose 4 5/8 to 117 1/2 yesterday. >