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Sat, Nov 13, 2004 - Page 12 News List

Dell's profits surge 25 percent in third quarter on record sales


Dell Inc said its profit surged 25 percent in the third quarter as the world's largest personal computer maker posted record sales due to rising technology spending in the corporate and government sectors worldwide.

Dell said on Thursday that it earned US$846 million, or US$0.33 a share, compared with US$677 million, or US$0.26 a share, a year earlier. The results matched the forecasts of analysts surveyed by Thomson First Call as well as predictions the Round Rock, Texas-based company made when it posted second-quarter earnings in August.

Revenue rose 18 percent to US$12.5 billion for the three months ended Oct. 29, up from US$10.6 billion a year earlier.

Dell chief executive Kevin Rollins said he expected fourth-quarter shipments would be about 20 percent higher than a year ago.

He predicted fourth-quarter earnings of US$0.36 per share, an increase of 24 percent, on revenue of about US$13.5 billion, up 17 percent.

And driven by the continued double-digit growth and the company's direct-sales model, the computer giant said it was on track to become a US$60 billion company sometime in 2006, roughly a year ahead of schedule.

For the third quarter, Dell saw 27 percent growth in Europe, the Middle East and Africa. The Asia-Pacific region and Japan grew by 25 percent. Dell said it was helped in the US by a 20 percent increase in spending by business customers.

"Our confidence in hitting some pretty good numbers is increasing" Rollins said. "We're ahead of plan. The growth rates appear to be achievable."

In the past several years Dell has increasingly pushed into consumer electronics, recently launching a revamped line of tiny digital music players and large plasma screen televisions.

Rollins, however, said Dell's consumer business still accounts for just 15 percent of the company's revenue. Most of Dell's business remains centered on the sale of large computer servers to corporations and other areas like technology services.

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