Dell Computer Corp said fiscal first-quarter sales will exceed forecasts and profit will meet targets, as the world's biggest personal-computer maker wins business from rivals and reduces costs.
Dell shares rose as much as 3.1 percent on the news. Revenue in the period ending May 3 will be about US$7.9 billion, the company said in a statement. Dell in February said it would earn US$0.16 a share on sales of US$7.65 billion to US$7.82 billion.
Chairman Michael Dell has predicted that corporate PC sales will revive in the second half. Dell has responded to the slump by focusing on sales to home users. In a meeting with analysts in New York, Dell will outline plans to boost sales of more-profitable corporate computers such as servers and storage devices.
"This is very positive for Dell, but I would be cautious about extrapolating that to the rest of the industry," said James Lyon, a portfolio manager at Oakwood Capital Management, which owns 136,000 Dell shares and manages US$375 million in assets. "We're coming out of our recession, but technology will lag a little while longer."
Analysts polled by Thomson Financial/First Call on average expect earnings of US$0.16 a share on revenue of US$7.7 billion. In last year's first quarter, Dell had net income of US$462 million, or US$0.17 a share, on sales of US$8.03 billion.
Dell sells PCs directly to customers, building systems only after clients place an order on the phone or the Internet. The company said manufacturing and operating efficiencies allowed it to reduce prices in the recent period, which helped boost sales.
Some investors said they were concerned that rising prices for PC parts, such as dynamic random-access memory chips, might reduce Dell's earnings.
Component costs have "flattened somewhat," compared with last year when they dropped, Chief Operating Officer Kevin Rollins said in the company's statement. At the same time, Dell reduced costs, he said.
In an interview before the forecast, Rollins said Dell will reclaim its No. 1 position in the PC market about two quarters after Hewlett-Packard Co completes its pending acquisition of Compaq Computer.
Dell is capable of regaining the lead because Hewlett-Packard and Compaq will have to decide which brands of PCs they are going to keep, said Bob Rezaee, a fund manager at Montgomery Asset Management, which owns 600,000 Dell shares and manages US$8 billion in assets.
"There are customers who will be disillusioned no matter what the decision," said Rezaee. "That's disruptive to the H-P/Compaq combination."
Dell, which supplanted Compaq as the biggest PC maker last year, had about 14 percent of world PC shipments in the fourth quarter, according to research firm IDC. Compaq and Hewlett-Packard together would have had about 19 percent of the market.
Hewlett-Packard is seeking to complete the proposed US$18.9 billion acquisition of Compaq by May. Director Walter Hewlett, who solicited proxies against the acquisition, has filed a lawsuit to stop the deal while awaiting the official results of last month's shareholder vote.
INSURRECTION: The NSB said it found evidence the CCP was seeking snipers in Taiwan to target members of the military and foreign organizations in the event of an invasion The number of Chinese spies prosecuted in Taiwan has grown threefold over a four-year period, the National Security Bureau (NSB) said in a report released yesterday. In 2021 and 2022, 16 and 10 spies were prosecuted respectively, but that number grew to 64 last year, it said, adding that the Chinese Communist Party (CCP) was working with gangs in Taiwan to develop a network of armed spies. Spies in Taiwan have on behalf of the CCP used a variety of channels and methods to infiltrate all sectors of the country, and recruited Taiwanese to cooperate in developing organizations and obtaining sensitive information
Seven hundred and sixty-four foreigners were arrested last year for acting as money mules for criminals, with many entering Taiwan on a tourist visa for all-expenses-paid trips, the Criminal Investigation Bureau (CIB) said on Saturday. Although from Jan. 1 to Dec. 26 last year, 26,478 people were arrested for working as money mules, the bureau said it was particularly concerned about those entering the country as tourists or migrant workers who help criminals and scammers pick up or transfer illegally obtained money. In a report, officials divided the money mules into two groups, the first of which are foreigners, mainly from Malaysia
SILICON VALLEY HUB: The office would showcase Taiwan’s strengths in semiconductors and artificial intelligence, and help Taiwanese start-ups connect with global opportunities Taiwan has established an office in Palo Alto, one of the principal cities of Silicon Valley in California, aimed at helping Taiwanese technology start-ups gain global visibility, the National Development Council said yesterday. The “Startup Island Taiwan Silicon Valley hub” at No. 299 California Avenue is focused on “supporting start-ups and innovators by providing professional consulting, co-working spaces, and community platforms,” the council said in a post on its Web site. The office is the second overseas start-up hub established by the council, after a similar site was set up in Tokyo in September last year. Representatives from Taiwanese start-ups, local businesses and
‘DETERRENT’: US national security adviser-designate Mike Waltz said that he wants to speed up deliveries of weapons purchased by Taiwan to deter threats from China US president-elect Donald Trump’s nominee for US secretary of defense, Pete Hegseth, affirmed his commitment to peace in the Taiwan Strait during his confirmation hearing in Washington on Tuesday. Hegseth called China “the most comprehensive and serious challenge to US national security” and said that he would aim to limit Beijing’s expansion in the Indo-Pacific region, Voice of America reported. He would also adhere to long-standing policies to prevent miscalculations, Hegseth added. The US Senate Armed Services Committee hearing was the first for a nominee of Trump’s incoming Cabinet, and questions mostly focused on whether he was fit for the
RSS